How debit cards made me bankrupt

Arjun Patnaik
Aug 22, 2017 · 6 min read

I have read many profound posts on Medium and been inspired to look at my life differently. Yesterday one such post by Google employee Scott Riddle reinforced the concept of mortality and inspired me to write this post. What struck a chord with me was how fickle life is and how little control we have at times. However this post also made me think about one of the biggest setbacks in my life and how I could have taken control.

So to cut to the chase, I was 28, living the good life in the US on a fast track leadership program with one of the biggest multinational companies in the world. I was, as they say — “Living the dream”. Flying business class, living in the best hotels and jet setting between cities, countries and continents. Life was great. I felt un-touchable. Then suddenly it all came crashing down. One fine morning, sitting at home I logged in to my bank account to check my account balance and something seemed off. I literally rubbed my eyes. It couldn’t be real. Surely my eyes are deceiving me. Surely there had to be a mistake. The bank must have forgotten to add a few zeros due to an error. It wasn’t a mistake! My entire life savings that were in my bank account (We will get to this part later in this post) were wiped out save for Rs.25,000 ($400). Over the course of a month, withdrawals were made from my bank account to clear my savings totaling roughly Rs.25 Lakh (~$40,000). I was shocked, I was embarrassed, I was horrified, I was scared. Life in that moment came to a screeching halt. I will save you the gritty and grimy details (for another post) but long story short my debit card had been skimmed/cloned when I was in the US and with those details over a course of a month my account had been cleaned out completely. We met many people, lawyers, police, bank officials yet no one was able to help. “we feel really sorry for you Mr. Patnaik but since the card was cloned outside India there is very little we can do”. I’m not writing this post as a desperate cry for help (we are continuing to fight the good fight) or pity. I am writing this post so that you can take away something from my experience to help you avoid a completely avoidable tragedy and share what I learnt about myself going through this ordeal.

1. Please, please do your best to avoid swiping your debit/atm card when you are travelling internationally. Use a credit card/travelers checks/pre-paid cards as much as possible. Tourists and tourist spots are at high risk for skimming. Even if your credit card is skimmed your liability is capped at your credit limit. Also, when using credit cards, the burden of proof lies on the card issuing company and Visa/Mastercard. What that means is that you have a right to dispute (not pay) any fraudulent transaction on your credit card. Also, most credit cards have fraud loss liability insurance. In case of a fraudulent transaction on your debit card, the money has already been withdrawn from your account. You can run pillar to post yet the likelihood of getting your money back from banks/Visa are minimal (Trust me I learnt the hard way). So lesson 1 — Use a credit card with a lower limit vs a debit/atm card when travelling abroad or domestically

2. When travelling internationally for extended an period of time for work or even vacation make sure you update your international number (If you have one) with the bank or get international roaming on your domestic number. Most banks & card companies send you text alerts every time your card is used for a transaction or money is debited from your account. This is used as a measure to prevent fraud. This check doesn’t do you any good if your number is not active internationally or is switched off because you left your domestic phone at home. If your bank has the option of email alerts for transaction, make sure you sign up for that as many people may have international data roaming which will give you access to your emails and alert you in case of any fraudulent activity on your card/bank account. Worst case, update the bank/credit card company with a trusted family member/friends’ number for transaction alerts so that they may warn you in case of irregular and shady transactions So lesson 2 — At the risk of being labelled paranoid, take all measures to ensure that you have access to transaction alerts on your bank account and credit cards at all times especially during international travel.

3. Sure, it feels great as a twenty something to see your bank balance swell, but do yourself a favor, learn about the basics of investing. It’s the dumbest thing one can do to keep all of your savings in your bank account. If you don’t have the time to learn about investing, talk to your family/friends. If you don’t have any friends, your bank relationship manager will be more than happy to earn a commission off your dime and help you park your money in some reasonably safe mutual fund/insurance policy. Heck, if you live under a rock and don’t have a bank relationship manager just open a friggin Fixed deposit. But do not keep more than 1.5 months’ salary in your bank account. You are not only missing out better interest income from mutual funds/Fixed deposits you are also putting yourself at a greater risk of banking/debit card fraud. So lesson 3 — Please get off your lazy ass and invest your salary/money in anything other than your savings/checking account.

4. It felt damn good to hoard money and see my net-worth grow every month when my salary was credited to my account. It was hard earned and month by month my sense of esteem attached to my net worth was slowly inflating. Till it deflated like a party balloon. And suddenly I realized, damn, I wish I had just spent some of that money on myself. I’m not going to argue against the virtues of saving your income (not at all) but I urge you, please don’t become a hoarder. Live a little. Spend your hard earned money on stuff you enjoy, on your family, on making people happier for it could all go away suddenly and then you would be wishing if only I had just said F it and gone on that crazy backpacking trip to Germany. So lesson 4 — Saving is a virtue but hoarding is a sin. Don’t be afraid to spend some of your money on stuff that makes you happy. As long as you are prudent and disciplined with savings you will be fine in the long run

5. Ok, so this might overlap a little with my previous point but after the event I used to often think, I wish I had just given that money to charity instead of lining the pockets of some fraudsters in Mexico. Don’t get me wrong, I’m not asking you to emulate the monk who sold his Ferrari but my episode just made me realize how important it is to give back. At the risk of being repetitive, please don’t hoard, give back to society, earn some good karma. Rather have your money working to improve the lives of the less fortunate than ending up in the pockets of thieves. So lesson 5 — Be generous in donation with your money. It’s important to earn interest by investing but its equally important to earn good Karma by donating.

6. For a while it was very hard for me to talk about this episode with anyone other than my close family. I was embarrassed, ashamed and frankly disappointed with myself for my careless mistakes. I got over the shock of the loss over time but the embarrassment due to this episode lingered. Everywhere around me I see people making similar mistakes and adopting a careless attitude towards financial security. I wanted to talk to people but the shame of the episode kept tugging me back and stopped me from helping people realize the true gravity of the risk. Today I take a step towards embracing this event and starting my journey to make people aware of the perils of a cavalier attitude towards financial security. So lesson 6 — Get over yourself and move on from your shame. People really don’t care about your stumblings that much. They do care about what they can learn from your experiences.

This is my humble attempt at starting the conversation on financial security and if even one person who reads this saves himself from financial fraud the purpose of this article would have been achieved.

Happy to hear your thoughts on the above.

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