Riskiest places to use debit cards

[fgg]

Debit-Card 'Skimming' Scams

Three steps to take to protect your account data from getting into the wrong hands

Whether by choice or necessity, American consumers are increasingly relying on debit rather than credit cards. Debit card spending has risen steadily, growing from 47.7 percent of purchases made with plastic in 2003 to 58.9 percent in 2008 and it is expected to surpass 67 percent by 2013, according to the Nilson Report, a newsletter that tracks the consumer payment industry.

When you use a debit card, the money is immediately taken from your checking account. While using debit guarantees that you pay as you go, these cards have downsides, including a growing appeal to thieves. "As economic conditions have worsened, there's been a noticeable increase in all types of card fraud," says Avivah Litan, an analyst specializing in fraud detection and prevention at Gartner Research in Stamford, Conn. "But ATM and debit-card fraud is the top area of concern we're hearing about from banks all over the world."

Unlike credit-card thieves, who usually charge merchandise and then resell it to come up with money, people who create counterfeit ATM or debit cards by stealing your PIN and other account data can simply pull cold cash from your bank account. Using a technique known as skimming, they set up equipment that captures magnetic stripe and keypad information when you input your PIN at ATM machines, gas pumps, restaurants, or retailers.

Here's how you can protect yourself:

Don't Type in Your Pin at the Pump
Be especially vigilant at gas stations, Litan says. "Gas pumps are notorious for skimming because they're produced by only a couple of different manufacturers, and if someone gets the key to one from a disgruntled employee, they can insert a skimming device inside the pump where it can't be seen," she says. She recommends using a credit card rather than a debit card when you fill your tank.

If you must use a debit card at the gas pump, choose the screen prompt that identifies it as a credit card so that you do not have to type in your PIN. The purchase amount will still be deducted from your bank account, but it will be processed through a credit-card network, which will give you greater protection from liability if fraud does occur. This is because card issuers typically have "zero liability" policies for both debit and credit cards, but sometimes exclude PIN-based transactions from that protection.

Stick With ATMs Located at Banks
To reduce your risk at ATMs, use machines at banks rather than in convenience stores, airports, or any isolated locations, advises Darrin Blackford, a spokesman for the U.S. Secret Service, which investigates financial crimes involving interstate commerce. "A thief has to be able to attach and retrieve a skimming device to use the data it's gathered," he says. "And that's more likely to happen in nonbank settings where there's less traffic and no surveillance cameras."

That doesn't mean that bank ATMs are immune, however. In August 2008, Wachovia Bank reported that several debit-card "identities" were stolen when a skimming device was placed on an ATM at a branch in Cape Coral, Fla.
"It's often hard to spot skimmers," Blackford says. "But if you notice a change at an ATM you use routinely, such as a color difference in the card reader or a gap where something appears to be glued onto the slot where you insert your card, that's a warning sign you'd want to report to the bank that owns the machine."

Closely Monitor Your Bank Accounts
Check them regularly—preferably online rather than waiting for monthly statements to arrive in the mail. Federal law limits your liability for fraudulent debit-card charges to $50, but only if you report the theft or loss of your card or PIN within two business days of discovering the problem. If you fail to report unauthorized charges within 60 days of the date the statement listing those charges was mailed, you could be liable for any unauthorized withdrawals afterward, including the full value of credit lines or savings accounts linked to your account for overdraft protection.

Visa and MasterCard have zero liability policies that go beyond federal law by exempting debit cardholders from liability in most circumstances when a bank investigation confirms that a transaction is fraudulent. But dealing with debit-card fraud can have a greater impact on your finances than credit-card fraud.

When you're a victim of unauthorized charges on a credit card, you won't be out any money while the disputed charges are being investigated. But when a thief steals money from your bank account using a counterfeit debit or ATM card, that cash won't be restored to your account until the bank conducts its investigation and classifies it as a case of fraud. Some victims of debit-card skimming scams who have contacted the Privacy Rights Clearinghouse, a nonprofit consumer advocacy group, about their experiences report that while banks in most cases replenished the stolen funds, some of them had no access to the money for several weeks while bank investigations were conducted.

http://finance.yahoo.com/banking-budgeting/article/108583/debit-card-skimming-scams?mod=bb-checking_savings

[MohandasKGanja]

I don't own one and have always turned them down.

[fgg]

I don't own one and have always turned them down.

how do you survive? do you always use cash?

[kingcap72]

I never type in the PIN number when I use my debit card. I always hit credit. And I prefer to use the ATM at my own bank because they don't charge you a crazy fee to withdraw the cash. And I check my bank account almost daily.

[Mel1973]

I use my debit card as a credit card also. It's safer AND I get 4 points for every dollar I spend. At then end of the year, I can have acquired enough points to get about $1,000.00 in gift cards and such....

[TonjaLasagna]

I use my debit card as a credit card also. I get 4 points for every dollar I spend. At then end of the year, I can have acquired enough points to get about $1,000.00 in gift cards and such....

i use my CC/Atm card to rack up flyer miles

[MohandasKGanja]

how do you survive? do you always use cash?

I use cash for small things and groceries. I have a very regimented list of stuff that I buy on a weekly basis, so I pretty much take out exactly what I need.

For something more expensive, I will use a credit card.

Over $100, I write a check. And my wife and I consult with each other before buying anything over $100.

[Grimmlok]

people still use cash? how primitive! lol

[Mel1973]

I have 5 $1.00 bills in my purse and that is IT.

[Charmed Hour]

I have 5 $1.00 bills in my purse and that is IT.

I have less than that. I never carry much cash. I use my debit as credit everywhere for everything. I get cash back with mine. Every few months I get a little notification of a deposit made to my account, generally about $50-100.

[greysfang]

I always use the credit option as well so I can get the points. I can't even remember the last time I got cash at an ATM.

[Anne of Cleves]

I use my debit card as a credit card also. It's safer AND I get 4 points for every dollar I spend. At then end of the year, I can have acquired enough points to get about $1,000.00 in gift cards and such....

I will start doing this too!

[MrsDark]

Gawd I couldn't live without my debit card. There's no way in hell I'm running around with cash in hand with my job (home care nurse, and I often run errands in between, an advantage of the job) and some of the places I have to go see patients. I have an excellent bank and can put a halt on that debit card with a phone call. Not to mention, it has my photo on it. So someone using it better look a lot like me in addition to having my PIN number.

When you get your cash stolen you have to eat it. That always unnerved me back in the days when my husband and I worked at casinos and took cash home daily.

[cupcake]

I only use cash or credit card which is paid off every month. Ive seen skimming in alot of places. My sister had to cancel her debit card that was stolen at Ikea and Bank of America took FORVER, a big hassle for her

[MrsDark]

Lifelock. I worry about even less with that.