Debit Cards – A Cautionary Tale

I got a call from a close friend the other day,
“Hey, I’m at the bank. My checking account is empty.”

He had taken a road trip and used his debit card at several places during his travels. Someone had forged a copy of his debit card and cleared out his checking account to the tune of $8,000.

The bank credited his account and made good, but there was a cost:

  • several hours dealing with bank fraud departments
  • bounced checks for a few days
  • new cards take days to arrive
  • all this costs the bank and merchant substantial time and money

How did this happen?

  • It could have been a “skimmer” device on a gas pump.
  • It could have been a waiter at a restaurant with a device to copy cards.
  • It could have been a compromised Wi-Fi network or malware-infected computer that sent card numbers to the bad guys.
  • It could have been a compromise of a major processing company.

We will never know for sure.

So, what can you do?

Most importantly, I recommend you use a credit card (vs. a debit card) while traveling, and for any transactions where things seem “iffy.”Security Label

Second, take a close look at the card readers before you use an ATM or gas pump. If the reader doesn’t look right, or looks too big, or one pump doesn’t look the same as the others, don’t use it. Many pumps have a security label meant to deter tampering and installation of skimmers, but these are not failsafe. Scammers can purchase these online and replace them once they’ve broken the original seal.

When you’re at a restaurant, keep an eye on your card. Better to bring your card to the register yourself than to leave it on the table for the waitress.

Don’t submit financial or personal details over open or public Wi-Fi networks. Use secure networks for all your transactions; never include credit card or bank information in an email; and use complex passwords to protect your information – and also your customers’. (We’ll get into some password ‘pro tips’ in an upcoming post.)

And always make sure to double-check your statements. It’s also good to check balances and transactions online every day or two. As this recent article discusses, hackers are now learning how to install malware on ATMs that makes it unnecessary for them to place any physical hardware in order to gain access to customers’ information. And they may wait weeks or months before using the stolen information to access a customer’s bank account.

Therefore, the most important thing you can do to protect yourself as a consumer is to actively and consistently monitor your bank and credit card statements – not only immediately after making the purchase, but over time.