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| Debit Card Fraud |
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In the chronology of crimes involving bank frauds, debit card frauds closely followed on the heels of credit card frauds. Debit cards, for some time after they were introduced, have been more secure than credit cards (because of the PIN) but sadly, this is no longer the case. Using state-of-the-art technology and planning, fraudsters are now able to duplicate your debit card magnetic strip and they are also able to find loopholes in the PIN usage to obtain your PIN number. Once they have these two, a counterfeit card is generated and used just like your own debit card.
Mr. Smith and his family have been living in New Jersey for over 15 years. He has been out of the United States just once, on a vacation to Canada few years ago. He uses his debit card for groceries and other purchases monthly. This month, Mr. Smith observed withdrawal transactions on his account generated out of Romania for a sum of $1,500. Neither Mr. Smith nor any of his family had been to Romania during the last month. He called his bank frantically as the $1,500 transaction practically emptied his account balance. The bank informed Mr. Smith that he had withdrawn that amount from an ATM in Romania! Aghast, Mr. Smith explained that his debit card is with him in the US.
This is a typical example of how debit card frauds come to light. His debit card was possibly duplicated at one of the stores where he swiped it or at an ATM, leading to debit/credit identity theft. The information was sold to fraudsters outside the US, and a counterfeit debit card was generated and used for withdrawals.
How is it done?
There are multiple ways how you can become a victim of ATM card fraud. So it is in your interest that you be cautious while using your debit card. Here are the most common debit card frauds that are prevalent:
ATM Skimming
A scanning device (skimmer) is used here that copies the information present in the magnetic strip of your ATM card when u insert it in an ATM machine. When you perform your transaction, the skimmer copies all the details of your card on to the device and an overhead tiny camera records your PIN. The fraudsters can access the skimmer and camera using the laptop wireless feature sitting near by ATM machine or pull the skimmer and camera from the ATM and then copy the skimmer data into a computer. Now they make a duplicate magnetic strip using a device called MSR (Magnetic Stripe Recorder) and withdraw large sums of money from your account using the PIN number.
ATM Card Fraud
When you submit your debit card for a transaction, the corrupt salesperson first swipes your card for the transaction. Then, he/she takes your card away from your notice for just a few seconds and swipes it on an electronic device that copies all the data on your cards magnetic strip. This information is passed on to an agent who creates counterfeit card with all your card information on it, obviously without your or your card company consent.
Finding your PIN is the next step:
The sales person observe and make a mental note of pin number while you enter it, this is known as shoulder surfing.
And viola, the corrupt salesperson now has both your card details and PIN number; he can withdraw cash directly from your account, not on credit, but YOUR OWN money.
Phishing
This is another type of fraud where you submit your own personal and financial information to the fraudster. The fraudster uses a website URL and design that closely resembles your bank website. The fraudster then sends emails at random, asking you to verify or update your account details along with a link embedded in the email. This is a URL to the fraudulent website made to look real with information and other details closely resembling the original. In the world of Internet fraud, this trick of sending emails to gather personal and banking information leading to identity theft is called phishing.
Once they have your ATM card number, expiry date and PIN, they can make counterfeit card and with draw cash using the PIN.
Consumer Negligence
You are not excused of negligence either. In rare moments of haste, you crumple receipts from merchants instead of shredding them. Did you notice that some of these receipts have your account or card number, either in full or at least partially? A fraudster who has access to this bit of paper might gather some more private information about you. The fraudster uses this information to call up the bank with your name, convince them of the identity and then gradually take over the account, first by requesting for a change in the address and then ask for re-issue of cards or make bill payments. |
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What is the impact?
Your checks may be dishonored for lack of funds, leading you to default on payments to some other accounts. Debit card fraud may happen long after the details are first stolen, or the fraudster may use the account occasionally to avoid suspicion, thereby gradually eating down into your savings, sometimes over several months if you do not notice your transaction statements. |
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What can you do to avoid it?
There is little that you can do after you have become a victim of ATM card fraud. But you can do your bit before you become an innocent victim. Few guidelines are listed below, which help you prevent debit card fraud and also protect you from credit card fraud. Be stringent on yourself and rest assured that you will avoid greater complications in future. |
- When you key in your PIN number at an ATM, make sure that you sufficiently obscure the keypad from being viewed by an onlooker.
- NEVER let the sales person take your debit card out of your sight. There is no need for him/her to do so, unless he/she intends to do something unlawful.
- Secure your debit card physically by storing it at a safe place.
- NEVER write your PIN number at a place where it can be seen by someone who you do not intend to show it to.
- ALWAYS shred the receipts from merchants that you no longer require, especially when you have paid for using your debit card.
- If you do not receive your debit card or PIN number from the bank within a reasonable amount of time after requesting one, check with the bank when it was sent and when you should expect to receive it. It may have been picked up by someone else in transit.
- When at an ATM, make sure that no external devices are attached to the ATM machine and no wires are hanging around.
- Check your account statements carefully for transactions that you may not have made.
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Sharing and Caring
Your friends and your family have gotten used to using debit cards so often that they may not realize how negligence over simple transactions on your account can lead to troubles far beyond the ease of using a debit card. Therefore, please let your friends and family know of the simple means mentioned above to prevent your debit card from being involved in a fraud. |
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