According to Consumer Reports, more and more Americans are making their purchases with debit cards. While debit cards are convenient, there is at least one good reason to reverse this trend. Debit cards are vulnerable to fraud that could leave cardholders without funds. Fortunately, there are some simple measures to avoid becoming a victim of a debit card scam.
Potential Problems with Debit Cards
Each time a debit card is scanned, the magnetic strip on the back of the card transfers information. When someone sets up equipment to capture that information fraudulently, it is called “skimming.” While credit cards are also vulnerable, thieves must run up a credit card with purchases and then sell them for cash. With a debit card, they can simply withdraw cash directly.
Skimmers most commonly install small devices on machines that accept debit payments but are not watched closely like gas station pumps or vending machines. Some contain cameras that capture customers entering their PINs.
If someone uses a credit card without the cardholder’s knowledge, the credit card company will likely cancel the card and delete the charges. Not so with a debit card. Those charges result in immediate withdrawal from a bank account, and even if the cardholder is eventually reimbursed by the bank it won’t happen overnight. Federal law limits consumer liability to $50 on credit card purchases but, according to Kiplinger.com, debit card fraud may leave cardholders paying $500 or more.
How to Avoid Debit Card Fraud
The most obvious way to avoid debit card scams is not to use a debit card in the first place. Request a simple ATM card that cannot be used for purchases, only cash withdrawals, or use a credit card instead. A prepaid credit card would be the least vulnerable to fraudulent charges.
If the convenience of the debit card is too hard to give up, use it wisely. Avoid gas station scanners completely or use the debit card as a credit card by pressing cancel when it asks for the PIN. Use only bank branch ATMs, avoiding those without security cameras. Protect personal information from hackers by installing spyware on computers and shutting them down after shopping.
Fraudulent usage of both credit and debit cards is common, but credit cards offer better protection for the consumer in the event of fraud. Debit card users should take every measure to protect their PIN and check bank balances frequently to identify fraudulent charges or withdrawals immediately. Remember: Overdraft protection is great if the charges are legitimate, but it can also help scammers drain bank accounts beyond their current balances.
References:
Consumer Reports: Debit Card Scams
U.S. PIRG: Consumer Fact Sheet
CreditCard.com: Gas Station Card Skimmers
Jennifer Groepl - Living the good life in beautiful Cape Coral, Florida, Jennifer Groepl is currently working on her YA fiction projects. An intrinsically ...
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