Debit cards at risk for fraud
Posted by Robert Siciliano on July 31st, 2009
Robert Siciliano is a NextAdvisor.com Expert Guest Blogger
There are 437,000,000 debit cards in circulation, and their use is on the rise. Criminal hackers are paying attention. Credit cards offer some measure of protection, but when a debit card is compromised, the stolen money is taken directly from the victim's bank account.
Federal laws limit cardholder liability to $50.00 in the case of credit card fraud, as long as the cardholder disputes the charge within 60 days. Debit card fraud victims must notify the bank within two days in order to maintain this $50.00 limit. After that, the maximum liability jumps to $500.00. And if a victim doesn't discover or report the fraud until after 60 days have passed, the liability could be the entire card balance, for a debit or credit card. Once your debit card is compromised, you might not find out until a check bounces or the card is declined. And once you do recover the funds, the thief can just start all over again, unless you cancel the account altogether.
There are a few known scams that can make you vulnerable to debit card fraud.
There's the bait and switch. When making a purchase online, you may be prompted to make an additional purchase that appears to be a one time fee, but is actually an ongoing monthly debit that is nearly impossible to cancel. That's when canceling your card is the only way out. While this isn't technically criminal hacking, it is very slimy marketing. The best way to protect yourself from this one is to always read the fine print before making an online purchase. Just be smart.
Unless you have been living in a cave, you've probably received a phishing email at some point. Hackers, assisted by teams of psychologists and sociologists, are designing and selling phishing kits to one another. They know what makes you tick and they know what will convince you to click on a link. These people are professionals. They used to give themselves a day with misspellings and obvious discrepancies, but now they are organized and sophisticated. And as more people go paperless and get their bank statements online, it is becoming more common for criminals to take advantage of that process, sending emails that appear to be statement notifications. If you think an email might be phishing, delete it immediately. And don't click on links in emails. Either manually type the link into the address bar, or use your bookmarks menu.
According the the Secret Service, Skimming is one of the financial industry’s fastest growing crimes. The ATM Industry Association reports over one billion dollars in annual global losses from credit card fraud and electronic crime associated with ATMs. A skimmer is a hardware device that a thief places on the face of an ATM, which matches the machine itself. It's almost impossible for a civilian to notice the difference unless the skimmer is of poor quality, or the civilian has a unique eye for security. Often, the thieves will mount a small pinhole camera somewhere near the ATM, perhaps in a brochure holder, to record the victim's PIN. Gas pumps are equally vulnerable to this scam. Pay very close attention during ATM and gas pump transactions. If something seems wrong, it is wrong. Look for double stick tape, removable features on the face of the ATM, a card sticking inside the reader, or additional mirrors or brochure holders that could contain a small camera.
You can also try to protect yourself from new account fraud. Get a credit freeze . Go to ConsumersUnion.org and follow the steps for your particular state. This is an absolutely necessary tool to secure your credit. In most cases, it prevents new accounts from being opened in your name. This makes your Social Security number useless to a potential identity thief. And invest in identity theft protection . Not all forms of identity theft protection can be prevented, but identity theft protection services can dramatically reduce your risk.
Robert Siciliano, identity theft speaker, discusses ATM skimming on Fox News and credit card fraud on CNBC.
Robert Siciliano is CEO of IDTheftSecurity.com , an identity theft expert, professional speaker, security analyst, published author and television news correspondent. Siciliano works with Fortune 1000 companies and startups as an advisor on product launches, branding, messaging, representation, SEO and media. Siciliano's thoughts and advice on all these matters appear often in both the televised and print news media including CNN, MSNBC, CNBC, FOX, Forbes and USA Today. He has 25 years of security training as a member of the American Society of Industrial Security. He is the author of two books, including The Safety Minute: Living on High Alert; How to take control of your personal security and prevent fraud . He's also partnered with Uni-Ball to help raise awareness about the growing threat of identity theft and to provide tips on how you can protect yourself.
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