What more do I need to know to prevent debit card fraud?
Protect your debit card as well as the account number, expiration date, security code on the back, and the PIN. “Even if you never lose possession of your card, someone who learns your account number, security code and PIN may be able to use that information to access your account and create counterfeit cards,” said Aurelia Cardamone, an FDIC Senior Technology Specialist.
While in many cases you are not responsible for unauthorized transactions (see federal protections described later), it can be a hassle resolving the situation. Here’s how to avoid becoming a victim:
- Never write your PIN on or near your card. Memorize it instead.
- Don’t give out bank account information over the phone or the Internet unless you have initiated the contact or you know the person is who he or she claims to be. For example, beware of deceptive calls or e-mails from crooks claiming to be from your bank asking you to “verify” (divulge) your account information. “Don’t fall for it,” said Cardamone. “A true representative of your bank will never need to ask for your PIN because your bank already has your account information.
- Don’t share your debit card PIN, security code and other account information with friends or relatives who aren’t co-owners of your account. Likewise, never reveal this information to new “friends” you meet over the Internet. “Common scams start with a job offer or an Internet friendship or romance that leads to pleas for money transfers and secrecy,” said David Nelson, an FDIC fraud specialist.
- Take precautions at the checkout counter, ATM and gas pump. Always stand so that no one can see the keypad where you enter your PIN. At retail establishments, it’s best to use do-it-yourself scanners. If you give your card to a clerk, be on guard against a dishonest employee who runs your card through two scanners instead of one. The second scanner could be capturing your account information to make a counterfeit card. In general, be alert for suspicious-looking devices that may be used to “skim” information from your card.
- If you use your debit card to shop online, consider extra precautions with your personal computer. Experts advise installing and periodically updating virus and spyware protection and a “personal firewall” to stop thieves from secretly installing malicious software on your personal computer remotely that can be used to spy on your computer use and obtain account information.
- Look at your bank statements as soon as they arrive. Or, better yet, review your account each week by phone or the Internet. Promptly report any discrepancy, such as a missing payment or an unauthorized transaction, to your bank. Your quick attention to the problem may help limit your liability and give law enforcement authorities a head start on stopping the thief.
What federal protections cover consumers who use debit cards?
The federal Electronic Fund Transfer Act (EFTA) protects you from errors, loss or theft of your debit card. However, unlike the Truth in Lending Act protections for credit cards, which cap a consumer’s liability for unauthorized transactions at $50, the law limits liability to $50 if the debit cardholder notifies the bank within two business days after discovering the theft. If you don’t notify your bank within those two days, you could lose up to $500, or perhaps more. In the worst-case scenario — if you receive a bank statement that includes an unauthorized debit-card withdrawal and you wait more than 60 days to alert your bank — you could be liable for any amounts from transactions made after that 60-day period.
The good news is that many banks don’t hold a consumer responsible for unauthorized transactions if he or she notifies the institution in a timely fashion. But remember that with a debit card, the money tapped by the thief has already been taken out of your account.
Under the EFTA, a bank has 10 business days to investigate the matter (20 business days if your account is new) and report back to you with its results. If the bank needs additional time, it may, under certain circumstances, temporarily give you some or all of the disputed amount until it finishes its investigation. Generally, a bank is allowed up to 45 days of additional investigation time (90 days for certain transactions). “But until the dispute is resolved,” said Creamean, “you should be prepared to pay your mortgage, car payment, credit card bill and any other obligations that may come due.” Also, she said, if the bank’s investigation finds there was no error, theft or loss, it can take back the money it put into your account, after notifying you.
Source: FDIC Consumer News