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Credit and debit card fraud is inevitable today. In just over a year, I’ve experienced four bouts of fraud: one with a debit card and three with credit cards. The experiences changed the way I access my cash and swipe to make payments.
Dealing with Debit Card Fraud
I opened my banking app to deposit a check, and a jolt went through my system. My checking account had suddenly dropped by $600. I scrambled to check recent transactions and noticed two large ATM withdrawals had been made for $300 each the day before – transactions I had not made.
Two minutes later I connected with my bank’s customer service department and reported the fraud. I was given a $600 temporary credit on my account while the bank investigated and ultimately found me not responsible for the transactions.
I didn’t know the thieves, but I could immediately identify how and where my card had been skimmed.
In an attempt to mitigate risk, I rarely use my debit card because I know it’s more difficult to deal with and flag the fraud than it is with a credit card. For that reason, I only use a debit card to take out cash. I used my debit card at an Allpoint ATM in a local convenience store to avoid an ATM fee. That ATM had a skimmer on it and stole my information. So I had $600 stolen in exchange for saving $3.
Naturally, I’ve since changed some of my debit card behaviors.
Here are a few things I now do to reduce my risk of fraud that you can try, too.
1. Only use ATMs inside banks.
The first move is to only use ATMs inside a physical bank branch. A skimmer could still be affixed to the ATM, but it’s far less likely. I use an online-only bank, so I don’t have physical bank branches. Fortunately, my bank reimburses up to $15 in ATM fees each month. This way, I reduce the risk of fraud and don’t have to pay fees.
I also always cover my hand when typing my PIN. Some skimmers have little cameras in the ATM to capture your PIN as well as your debit card information. Covering your hand is just one more way to shield your information from fraudsters.
2. Exclusively use credit cards.
These days, I never use my debit card outside of walking into a bank to withdraw cash.
Debit cards have slightly different fine print, which could leave you liable when it comes to fraud. The amount you could be held responsible for differs based on when you report the fraud. If your card has been stolen and you report it before a charge is made, then you have no liability. Otherwise, it could cost you $50 if you report it within two business days or $500 if it’s more than two business days but less than 60 calendar days after your statement is sent to you. And if you wait 60 calendar days after your statement is sent to you, then you are 100 percent liable for the losses incurred.
For this reason, I only use credit cards if I don’t pay in cash. Besides the liability factor, I’d prefer thieves to not have direct access to my bank account.
3. Check accounts (at least) twice a week.
One bout of fraud can make you wary, but four in a year can make you downright paranoid.
In an effort to feel more empowered, I check all my accounts at least twice a week to ensure there are no unaccounted for charges. The fraud departments are typically very fast at catching and flagging odd charges and suspending your card until they can reach you, but it still feels good to be proactive.
It’s important to keep an eye on your checking account if you regularly use your debit card, because fraudulent charges don’t always get flagged as quickly and it means thieves have direct access to your money. As I mentioned above, you could be liable for the charges if it isn’t caught soon enough.
4. Don’t keep every card in your wallet.
Only keeping one or two of cards in your wallet is another way to reduce the risk of fraud. It’s quite possible the reason two of my cards experienced fraud in less than a month isn’t because I came into contact with two skimmers, but rather because I left my wallet out in a hotel room. After speaking with a former risk analyst, I found out it’s not uncommon for your numbers to get swiped when you leave your wallet unattended. This doesn’t mean your card itself is stolen – just the numbers are copied down.
For this reason, it’s smart to never carry all your credit cards at one time. And never leave your wallet outside of your possession.
Closing a Card
Store cards are rife with issues: They often have high interest rates, poor customer service and usually only provide good rewards at the branded store. I opened a store card for one of the only clothing places I elect to shop, but after two bouts of credit card fraud on that one card – I’m closing it down. I’m doing this primarily because the customer service department associated with this credit card is horrible. It took three phone calls, two emails and an online chat session for them to finally reverse the $999.99 charge that had been flagged as fraudulent.
Don’t Make a Payment on a Fraudulent Charge
This brings me to a final point when dealing with credit card fraud: Do not make a payment on a fraudulent charge. Check the fine print of your credit card, but in most cases, you have zero liability. This means you shouldn’t be asked to make a payment on a charge you didn’t make. Don’t even pay the minimum due. Instead, ask for a temporary credit while the creditor investigates. If you’re deemed responsible, then you’ll need to make a payment. Until then, don’t pay for someone else attempting to rip you off.