How Debit & Credit Card Fraud Works & 5 Ways To Protect Yourself

Wed, 18 Jan 2012

You just checked your bank accounts, like you normally do everyday, but today there is a big problem -- your checking account is negative! You were sure that you had enough money to cover your transactions, but what about those three transactions for $400 at Wal-Mart in Texas?  You've never been to Texas, and your debit card is in your wallet, how could these transactions have happened? Unfortunately you're not alone, you have just fallen victim to one of the world's fastest growing financial crimes – Debit & Credit Card Fraud.  

 

How They Get Your Digits

These fraudsters are able to steal your debit card information a couple different ways. One is a skimming device (pictured above), which captures all of your card information when you swipe your card to make a purchase or withdraw money at an ATM.  Crooks know how to implant these readers at gas pumps and place them over card readers at ATMs (ATM and Gas Pump skimming). third party link Some criminal groups have even replaced the card readers at stores third party link with their own. Card information is also stolen when computer hackers install a virus into a merchant's card processing software, which allows the fraudsters to steal the card information as the data passes along the authorization process (Merchant Data Breaches) third party link.

 

How They Use Your Card

So, how did they use your stolen information to buy things in Texas?  Most likely, they used a device to clean magnetic stripes off another debit or credit card and re-encode it with your stolen information. The fraudsters can even use a hotel room key to make purchases using your debit card information. That's right, the person who made the purchases at Wal-Mart in Texas (most likely a self-checkout terminal) could have been using a hotel room key with your debit card information to buy those flat screen TVs. If the fraudsters are not daring enough to go into an actual store, they can always place an order online or over the phone with your debit card information and have the goods shipped to them (most likely a P.O. Box opened with fraudulent identification).  

 

Now What?

Don't cut up all of your cards and go back to cash just yet. The bank works very hard to detect these card compromises and prevent the fraud from happening to you.  We have monitoring in place to help prevent and minimize fraud losses.  And, we collaborate with other banks and law enforcement to make sure the people responsible are brought to justice (Skimming Arrest). third party link

 

5 Things You Can Do to Help Protect Yourself Are:

  1. Review your bank accounts daily

  2. Sign up for text alerts and/or use mobile banking

  3. Be aware of your surroundings when using your debit card

  4. When entering your PIN number, cover it using your hand so people can’t look over your shoulder and steal it

  5. Make sure the bank has your most current contact information in case of a breach

 

If you see any unauthorized transactions, call the bank as soon as you can so a dispute can be filed and we can reimburse you for the fraudulent charges. As the card industry and law enforcement work to secure America's payment systems, look for future blog posts on Chip & PIN technology third party link.

 

What questions or comments do you have about ATM and debit card fraud?  

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4 comment(s).

Libbe
June 26, 2012 at 8:11 pm
I was reading through most of the blogs and I have to say you've one a great job. I'm very impressed. However, there's one slightly annoying issue I've always wanted to know. I was told by one of your phone reps recently that it takes up to 30 days to get my refund back on my Visa Check Card. She goes
C Nelson
August 21, 2013 at 2:07 pm
I got my money posted back to my account from Hulu Gift Cards bought from someone who stole my number the very next day. The items purchased from Bed Bath and Beyond were credited back within 4 days. I asked my bank to give me the phone numbers attached to those charges (some banks let you see them online some don't) and called them to take the charges off or depending on how fast you caught them they may just be authorizations (mine were). Because I have alerts on my cards I knew immediately and reported it the same day the charges were made.
Libbe
June 26, 2012 at 8:21 pm
Sorry, my computer is acting very weird. So, she goes: “however, it’s rare that it’ll take that long and you may see the refund as early as 1-5 days.” She was pretty cool and I figured she was just doing her job. Can you explain what’s going on with a little more detail please?
Kevin Thompson
July 6, 2012 at 9:51 am
Good question Libbe, the timeframe a merchant has to issue a refund is actually beyond our control as the card issuer. After you return merchandise, the refund needs to go through the merchant's bank and processor before getting back to Webster, but once we receive the refund, we will credit your account. We can dispute the charge on your behalf through Visa if we don't receive the refund within 15 calendar days of the date of cancellation/refund request, but this timeframe is a Visa guideline and each merchant may have their own unique return policy.