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How to prevent and avoid debit card fraud

Although fraud prevention technology is advancing to protect consumers and financial institutions, cyber criminals and hackers are still finding ways to breach security and steal data.

Although debit cards and the financial institutions that issue them have debit card fraud protection measures, you can prevent fraudulent charges on your debit card and debit card scams by following the precautions outlined in this article.
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What is debit card fraud?

A debit card is a type of banking card that is typically connected to a checking account held at a credit union, bank, or other financial institution. A debit card is convenient to have because it provides you with access to your money at ATMs across the U.S. and around the world.
The difference between a debit card and a credit card is that purchases made with a debit card will withdraw the funds from the checking account the card is connected to. All purchases made with a credit card are charged to the credit card account and a monthly bill statement is sent to the consumer.
The credit reporting agency Experian describes debit card fraud as an instance when someone gets access to your debit card number or PIN and makes unauthorized purchases or withdrawals from your account.
Because a debit card is linked to your checking account, this makes personal accounts more vulnerable to unauthorized transactions, especially if your card is lost or stolen and gets into the hands of a dishonest person.
Unfortunately, there are ways that cyber criminals and account hackers can access debit card information even if the card is still in your possession.

Are you liable for fraudulent debit card charges?

According to the United States Federal Trade Commission, if your credit, ATM, or debit card is lost or stolen, federal law limits your liability for charges made without your permission, but your protection depends on the type of card — and when you report the loss.

How can someone use my debit card without having it?

Despite protective anti-fraud technology utilized by financial institutions, today’s cyber criminals are continually finding new ways to hack people’s financial accounts. Indeed, even if your debit card is not lost or stolen, fraudulent activity on a debit card can still occur.
Phishing. Phishing involves a cybersecurity scam where the attacker sends an email that appears to be from a trusted source but is not. It can also take the form of a fake website or account login page that appears to be legitimate but is not.
Skimming. The FBI defines skimming as occurring when devices illegally installed on ATMs, point-of-sale (POS) terminals, or fuel pumps capture data or record cardholders’ PINs. Criminals use the data to create fake debit cards and then steal from victims’ accounts. It is estimated that skimming costs financial institutions and consumers more than $1 billion each year.
Spying. This could be as simple as a thief hiding a camera near an ATM to gather people’s information, or someone standing too close behind you at an ATM and observing your PIN number.
Security breaches. Hackers sometimes find their way past the security technology of retails, healthcare providers, and other businesses that store people’s personal information. As such, a security breach at any one of these institutions can put your personal information, including passwords, emails, and usernames, at risk of being stolen.

Places you should avoid using a debit card

Gas pumps are vulnerable to debit card and credit card fraud due to the ability of thieves to access the machines while no one is watching and attach skimming devices.
Bars and restaurants. Most establishments and their employees operate with honesty and integrity, however, there have been instances where an employee has stolen a customer’s debit card information and committed fraud.  
Retail stores. Today’s large retailers and national chains use fraud protection technology; however, security breaches still occur. Rather than give up the convenience of using a card to pay for merchandise, use your credit card rather than your debit card.
Online. When shopping online, it’s always safer to use a credit card than your debit card. Most credit card providers can send you alerts and notifications by email and text if there is unusual activity on your card.
Preventing debit card fraud
Debit card fraud protection can and does take place at several levels. This includes the technology used by financial institutions and retailers, and the fraud protection policies they put in place to protect their businesses and consumers.
As you can see, there are precautions you can take to reduce the likelihood of being a victim of debit card scams and fraudulent charges on your debit card.
  1. Set up alerts. Your credit union or bank representative can help you use mobile and online features to set up alerts and notifications that can be sent to you if an unusual activity is present on your card or account.
  2. Enable multi-factor authentication. This feature can also be set up from a mobile device or by logging into your online account. This type of account authentication system adds a second step when you log into your account. In addition to entering your password, a system-generated code is sent to you by email or text, and you will need to enter the code that is sent to you to log-in. This ensures that no one else can get into your account.
  3. Monitor account activity. Check your account activity weekly to see if there are purchases or withdrawals not made by you. Report any unusual activity to your financial institution immediately.
  4. Sign up for paperless statements. Statements sent by mail could end up in the wrong hands. Accessing your statements online from a secure home network offers more security.
  5. Consider using a credit card instead of your debit card. Again, credit cards tend to be safer than debit cards.
  6. Avoid ATMs. ATMs are certainly convenient, but they come with security risks, so be mindful of the ATM locations you do use.
  7. Practice good cyber hygiene. Keeping all these tips in mind and making smart choices when using your debit card will help you avoid different types of debit card fraud and fraudulent charges on your debit card.
  8. Use secure networks. This means avoiding public networks at coffee shops, airports, and other public places where hackers may be working to intercept your debit card information when you go online to make a purchase.  

What to do if your debit card is hacked

If you discover fraudulent charges on your debit card, you should:
  • Call your credit union or bank immediately so the card can be deactivated. A new card will be issued to you with a new number.
  • Follow up in writing. After speaking with an individual at your credit union or bank send them a letter describing the details of the fraud.
As you can see there are pros and cons of using a debit card, but overall, there are advantages to having a debit card. When you follow the best practices for fraud prevention, a debit card is a safe and convenient banking resource.

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CU SoCal takes privacy protection seriously, providing all credit union Members with resources for online banking fraud protection, mobile banking fraud protection, and identity protection.
Because we take your privacy seriously, CU SoCal's Identity Restoration Services are provided free to every member with a Rewards Checking Account.

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