A story on Bankrate.com really got me thinking about how many of us use our debit cards so freely. We don’t realize how vulnerable our information is every time we swipe our cards. Here’s what I took away from that story, with some additional commentary of my own:
While a recent employment spurt has helped many jobless citizens obtain work, a select few still facing financial hardship have turned to crime to make up for wages lost.
Americans who excessively use their debit cards anywhere to earn usage points redeemable for rewards may, in fact, be compromising their checking account information at any given swipe.
Unfortunately, as technology advances, so has the sophistication in the schemes devised to “skim” money from innocent debit card users.
Debit cards draw money directly from your checking account, making debit card fraud more detrimental to your finances than illegal credit card use because credit card owners who spot and report fraudulent charges can easily decline the charges and not pay the bill.
Understanding that there is no intermediary (such as a credit card company) between your money and a culprit when you make debit card transactions is reason enough to be more cautious of the places you use your debit card.
Thus, as an attempt to keep your personal finances personal, here is a list of the top five places where debit card fraud exist.
Gas Stations (Outdoors)
Everyone loves the pay-at-the-pump option for the convenience and time it saves you. For those same reasons, criminals love people who use debit cards at the pump. The culprits slip a “skimmer” into the card reader, sit in their car with a wired laptop, and gather your pin and card number before you can finish pumping your gas.
You can avoid being a victim of this petty crime by paying for your gas inside the station, using either the “credit” option on your card or cash.
The World Wide Web
The risks and lack of consumer protection associated with debit cards was not enough to detour more than 148 million US consumers from making online purchases in 2011.
The only things scarier than the possibility of Internet credit card fraud are the horror stories told by the actual victims that had their checking accounts completely wiped out by thieves.
The only lines web shoppers are concerned with involve bandwidth.
Shopping online provides you the opportunity to purchase the latest electronics, accessories, or clothes going virtually unnoticed by the masses. Unfortunately, some online debit card purchases provide the same anonymity to thieves looking for easy access to your checking account.
The easiest way to avoid online debit card fraud is by making your purchases in a store when possible. If you must make a purchase online, use a credit card.
In order to get cash from any ATM, you must enter your PIN number. Thieves know this and often plant skimming devices (and cameras to capture your PIN number remotely) on outdoor ATMs.
Yet, Julie McNelley, senior analyst for a Boston-based financial services research firm, suggests that even indoor terminals that card users must swipe to enter have been compromised recently. Aside from an unauthentic appearance, the other red flags that may suggest an ATM’s integrity has been compromised are:
- Any part of the ATM machine being broken
- False “out of service” signs to lure you to a nearby compromised ATM
- Weird textures when sliding your ATM card through the opening
If you’re skeptical about using an ATM due to the looks or location, simply do not use it.
I learned the hard way that it’s best to pick wisely when using your debit card at restaurants.
A waitress recently charged me a $10 tip for a five-dollar sandwich during happy hour at one of my favorite restaurants. I paid my tip in cash so you can imagine my frustration when I reviewed my online bank statement at the end of the night and realized this waitress felt her service was worth 200 percent of the cost of my meal!
Although, the owner willingly gave me a $10 bill when I returned to the restaurant with my bank statement and my signed receipt for the amount of five dollars, I lost my trust in the workers, and I only eat at this specific restaurant when I have the cash I need available.
Public Computers and Wi-Fi Hotspots
Before I could afford my own personal computer, I frequented the public library for all things Internet related, including shopping online.
At the time, I had no idea that software programs in the spyware genre could collect sensitive data and keystrokes (without the user’s knowledge) that could ultimately lead to the user’s financial demise.
While I still use public computers and unsecured networks to surf online on my iPad, I never purchase or enter my debit card number on a public computer now that I understand this activity leaves my checking account practically open to cyber thieves.
In most cases, debit card use saves us time and provides much appreciated convenience to our everyday life. Do yourself a favor by using cash when you can and staying away from the risky areas listed above, or you may be leaving your money conveniently in the sight of cyber culprits.