How Can I Prevent Debit Card Fraud?

As more and more consumers opt to pay with plastic instead of cash, fraud has become more prevalent. While there’s no foolproof way to prevent debit card fraud, there are measures you can take to protect yourself. By understanding how debit card fraud happens and making a few simple changes in how you handle your card, you can keep your accounts secure.

How Does Debit Card Fraud Happen?

Much like credit card fraud, debit card fraud happens when thieves get access to your card number and use it to make purchases. There are many different ways for thieves to obtain your information, including:

  • Phishing: Thieves will often create legitimate-looking websites with great offers to entice you to enter your card information.
  • Data Breaches: Hackers can steal your information from a merchant or bank database. A recent report cites that 16% of data breach victims had their debit card information compromised, and 3% had their PIN compromised.
  • Dishonest Staff: Staff at stores or restaurants may copy your debit card information down and use it to make purchases.
  • Discarded Documents: Thieves will dig through trash to find discarded receipts and statements that contain your account information.
  • Physical Theft: Thieves can steal an unguarded or forgotten card and use it to make purchases.

How Do I Know if Fraud Has Occurred?

The easiest way to detect fraudulent charges is to monitor your account daily through your bank’s website or mobile app. If you do not want to bank online, many banks also have a phone service where you can call in to check your balance and hear recent transactions.

If none of these options are available to you, you’ll have to wait for your monthly statements through the mail, or until the bank notifies you of suspicious activity. However, most banks today offer some form of over-the-phone and online banking.

How is Debit Card Fraud Different From Credit Card Fraud?

Debit card fraud differs from credit card fraud in a few ways:

  • When thieves use your credit card to make a purchase, no money leaves your bank account; it simply appears on your statement at the end of the billing cycle.
  • Banks may not refund a fraudulent charge after their grace period, leaving you a short window of time to identify the fraud and report it to the bank. Credit card companies usually don’t have this grace period and will refund your losses.
  • Because of the  Fair Credit Billing Act, you are only liable for $50 of unauthorized credit card charges. However, debit card fraud falls under Regulation E, which partially relies on how quickly you report the fraud to determine your total liability.

How to Prevent Debit Card Fraud

While there’s no foolproof way to protect your account from fraudsters, these steps can help you minimize the risk:

  • Protect Your Card: Keep your debit card close and ensure it’s always in a safe place. Check to see that it’s with you when you’re leaving stores and restaurants. You should never write your PIN on the card and you should consider placing a sticker over your CVV. Be sure to shred any documents that have your account information on them before throwing them away. If you misplace your card, put a freeze on it or notify your bank immediately.
  • Use Credit: Use your credit card whenever possible to avoid giving thieves direct access to your bank account. Credit cards typically have better fraud protection, meaning you’re less likely to suffer a financial loss if your information is compromised.
  • Guard Your Digital Data: Beware of phishing sites and avoid storing your card number with online retailers. It’s also wise to avoid making payments while connected to public wifi in cafes and restaurants.
  • Only Shop With Trusted Retailers: Before entering your card information, check to see that the website has “https” at the start of the URL, indicating that the site is secure. If you haven’t heard of the retailer before, it’s worth taking the time to research them to verify that they are a legitimate business.
  • Never Give Out Information Over the Phone: Be wary of any merchants who call and ask for your account information. It’s best to hang up and call the company back directly if you wish to pay for something over the phone.
  • Use Trusted ATMs: ATMs located in bank branches or stores are much less likely to be a target for skimmers. It’s always wise to look at ATMs and payment terminals in stores for any signs of tampering before you pay. If something looks out of place, avoid inserting your card and notify an employee immediately.
  • P.O. Box: Thieves target home mailboxes to obtain account details and other sensitive information. An inexpensive P.O. box can help you keep your information safe.
  • Monitor Bank Activity: Utilize your bank’s mobile and online banking options to carefully monitor your account. The sooner you notice fraudulent activity, the sooner you can put a stop to it. You may also be able to subscribe to text alerts that can notify you whenever your card is used.
  • Report Fraud ASAP: If you do notice any suspicious activity, report it to your bank immediately. Since thieves will likely keep using your card until it’s frozen, time is of the essence. The sooner your bank is aware of the situation, the sooner they can freeze your account and start the investigation process.

Pros and Cons of Debit Cards

Just because fraud can happen doesn’t mean debit cards should be avoided. There are still plenty of positives that come from favoring your debit card for purchases including:

  • Convenient: Paying directly from your bank account allows you to avoid paying credit card bills at the end of each month. It also means you don’t need to seek out an ATM to withdraw cash from your account.
  • Simplified Budgeting: Having funds leave your account as soon as you spend them might help you stick to your budget, spend less overall, and avoid accumulating interest on credit cards.
  • Earn Rewards: Some banks offer cash-back awards similar to those offered by credit cards, allowing you to save some money and earn rewards towards fun purchases.

However, there are a few cons to keep in mind when using a debit card, including:

  • Fighting Inaccuracies: It can be more difficult to get your money back when billing errors or fraud occurs because the money has already been taken out of your account.
  • Fees: If you use your debit card for a purchase and spend more than you have in your account, you may find yourself facing overdraft fees.

The Bottom Line

When you understand how debit card fraud occurs and incorporate these preventative measures into your daily routine, you can prevent thieves from gaining access to your account information. Since thieves tend to prey on unaware consumers, remaining aware and taking precautions is the best way to protect yourself.

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