With so many security breaches lately, many shoppers are wondering how safe their debit cards are.
It turns out there are some secrets about debit cards most users don’t know, and it turns out some of these cards are safer than others.
A debit card is a debit card, right? Not exactly. The consumer site Bankrate.com says some cards have more features –and more protections — than others.
– Some debit cards will help you look up a lost receipt, while others won’t.
– Some have a daily spending limit, cutting you off at $800 dollars, in order to protect someone from draining your account.
– Some debit cards will shut down with a change in your routine (like an unusually big purchase) as a protection from fraud.
In that case, if someone starts making multiple, big charges on the beaches of North Carolina….or in Los Angeles — when you don’t live there — the card may lock the account until you tell your bank you are on vacation.
How do you know what protections your debit card has? Just check with your bank.
While you are at it, make sure the bank has your cell phone number, so they can text you immediately if anyone makes a very large purchase on your debit card.
That way you don’t waste your money.
This morning on the way to work, I was listening to the Todd and Jayde morning show. One of members of the show, Annie, talked about how she believes that she was a victim of debit card skimming at a gas station. The result was that someone tried to steal $500 from her account and she couldn’t access any of her accounts online until the bank finishes investigating her case. Listening to the story, I had to look into the issue further myself and my conclusion is that you should NEVER use your debit card at a gas station. Do it the old fashioned way if you want that cash price, you have to use real cash over the debit card. Here’s why.
Skimming is a real problem and only getting worse
Last year Wisconsin issued a consumer alert warning that “skimmers” have been found at numerous gas stations across the state. A quick Google search reveals this happening in many other states nationwide. There are two types of skimmers, internal and external, but they both attempt to steal your card number and record your pin.
Why are gas stations a popular target? The payment terminals have minimal supervision so it’s pretty easy for someone to put a skimming device on without detection. With the potential for fraud in pay-at-the-pump transactions, it makes sense to go with cash or credit the next time you fill up.
“A consumer may likely have no indication that they used an altered dispenser until they find a discrepancy on their bank statements,” said Frank Frassetto, Division Administrator of Trade and Consumer Protection.
A study from FICO Card Alert Services reported a 70 percent increase in the number of debit cards that were compromised in 2016 at ATMs and at card readers used by merchants. Therefore this isn’t a problem that is going away.
The onus is on you
Credit cards generally provide you with more protection than debits cards. For credit cards, if your account number is stolen, not your physical card, you are not responsible for unauthorized charges under Federal Law. However, with debit cards, you must to spot the fraud and report it in short order. For debit cards, if your card and PIN have not been lost or stolen, you are not responsible for unauthorized charges under Federal Law if you report it within 60 days after your statement is sent to you. If an unauthorized charge goes unreported for more than 60 days, your money and future charges by the same person could be lost. If you lose your debit card or PIN, the time to report is usually much shorter (often 2 business days in order to limit your liability to no more than $50).
Given this scenario, it is unsurprising that banks have been replacing credit cards with newer, more secure chip cards because it is their potential liability; however, with debit cards, it is likely you have the old regular cards because the onus is on you.