Debit Card Fraud – Be On The Alert

American consumers are increasingly relying on debit rather than credit cards. Debit card spending has risen steadily – growing from 47% of purchases in 2003 to 59 % in 2008.  According to the Nilson Report, it’s expected to surpass 67% by 2013. 

Criminals have definitely taken notice. Fraud detection analysts note that while there has been an increase in all types of card fraud, ATM and debit card fraud is the top area of concern.  Scammers are becoming more slick and sophisticated and incidences of debit card fraud are becoming more commonplace.   

The most notable variation of this fraud is “skimming.” Skimming, a form of ATM fraud, allows a criminal to steal a consumer’s card number and PIN code – everything needed to effectively empty the victim’s bank account. They set up equipment that captures magnetic stripe and keypad information when you input your PIN at ATM machines, gas pumps, restaurants, or retailers. 

With nearly 2 million ATM machines in operation worldwide, criminals have a wide array of potential targets. The losses due to debit card fraud are expected to continue rising as the crimes, and their perpetrators, become more sophisticated. The Nilson Report states that losses due to fraud involving credit and debit cards rose 7% between 2008 and 2009. That number is expected to total $10 billion by 2015.

There are steps consumers can take to prevent debit card fraud: 

• When possible, use only ATMs that are located inside banks, where it’s much more difficult for a criminal to install the skimming hardware
• Don’t type in your PIN at the pump – gas stations are notorious places for skimming software.  Use a regular credit card instead
• Cover the keypad with your other hand when entering their PIN, to prevent any prying eyes from recording the code
• Check your bank statements immediately and thoroughly – make sure all payments are yours
• Closely monitor your account balance and transactions, by utilizing online banking, telephone, or by printing interim statements at the ATM
• Contact your bank immediately if your card is lost, stolen or subject to fraudulent use
• Keep a record of card numbers, PINs, expiration dates and 1-800 numbers for banks so you can contact the issuing bank easily in cases of theft
• Memorize your PIN number. Don’t use your birth date, address, phone number or social security number. Never store your PIN with your card, and do not make it available to others
• Keep your receipts. You’ll need them to check your statement. If they have your account number on them, tear up or shred receipts before throwing them away
• Mark through any blank spaces on debit slips, including the tip line at restaurants, so the total amount cannot be changed
• Know your limits. Many issuers limit daily purchases and withdrawals for your protection
• Do not use an ATM if it looks suspicious, it could be a skimming device
• Be wary of those trying to help you, especially when an ATM “eats” your card, they may be trying to steal your card number and PIN
• Do not give your PIN number to anyone over the phone, often thieves steal the cards and then call the victim for their PIN, sometimes claiming to be law enforcement or the issuing bank