How Debit Cards Have Become Main Targets For Fraudsters

It happened to me!

Ezinne Ukoha
Nov 16, 2019 · 7 min read

During the sweltering summer of 2009, before the arrival of erratic patterns that have left our favorite season unrecognizable, I was also a very different person, living a life not relatable to my present, thanks to my steady job of almost three years, at one of the top financial institutions in the country.

That early Saturday afternoon was hectic. I was determined to sneak in a quick workout before heading to Soho to meet up with some friends.

I rushed through the breezy doors of the West 76th Street branch of Equinox, and quickly headed to the locker room after checking in. Even through the hustle and bustle of weekend vibes, I couldn’t ignore the sullen woman sitting on the bench with a towel wrapped around her.

The lady was deposited across from one of the free lockers, where I through my bags with nonchalance, before making my way to the floor where arc trainers were waiting.

Almost an hour later, I was frantically digging into my bag for the wallet that I didn’t discover was missing until I was showered and dressed, with the mission of racing to the nearest subway station.

What followed was a series of unexpected events that showcased a frustrated and panicked young woman, who garnered no empathy from the stone-faced employees at the front desk, who summoned their equally unimpressed manager to take the hysterical club member off their hands.

The next few hours were harrowing at best, as I began the process of filing a police report at the local precinct, while spending considerable time on the phone with credit cards companies and my bank reps.

Unfortunately my social security card was among the stolen items, and I was thrust into the brutal consequences stemming from that reality when I kept receiving calls from places like Macy’s, Capital One etc., that needed to verify applications initiated in my name.

Since the thief was clearly maximizing the good fortune of my most valuable credentials, which posed an active threat to basic functionality, I was promptly advised to reach out to the IRS. The Identity Protection Specialized Unit arranges to have an Identity Protection PIN, issued, each time I file my taxes.

This is a non-negotiable that’s still part of the routine when that time of year is upon us.

To cut a long story short, the lesson of my life wasn’t received well, but it absolutely revolutionized the way that I fiercely guard what belongs to me, regardless of the value.

And in an interesting twist, the teary testimonial that I granted the police officers turned out to be quite helpful. It was confirmed that the woman in the towel, sitting on the bench, was responsible for cruelly turned my life upside down that hazy Saturday afternoon.

Fast forward to a decade later, and while I’ve managed to keep the promise of being overly paranoid with the right measure of alertness in both fancy and questionable arenas — I still find myself falling victim to a more sophisticated method of thievery that puts the advanced level of pickpocketing to shame.

Starting from around 2011, I’ve been privy to the rapidly increasing epidemic that presents the debilitating symptoms that surface when the debit card linked to your bank account is randomly compromised.

The first few times it happened, the discovery was made during one of many logins into my online checking account, which happens daily for the sake of keeping tabs on what I can’t control.

Chase Bank is quite stellar when dealing with longtime customers, who’ve reported unfamiliar activity that ultimately leads to the culprit of debit card fraud.

But it’s all about timing, and the type of cards that have been infiltrated.

If your credit card gets lost or stolen, you may be liable for up to $50 of the unauthorized charges, according to the Fair Credit Billing Act, and the rest will be refunded, although in most cases, issuers will that slide.

If the fraudster has your credit card details, but you still have possession of the card in question, credit card companies are required to give you back all the money that was charged without verification.

In both of those incidences, time isn’t a factor, which means that no matter when you make the report, you are guaranteed to get your refund from issuers.

Things get substantially more tricky when debit cards are involved, which reveals a lot about the formidability of this country’s credit system, when you consider the tangible protections in place for those consumers, compared to the less durable security measures for debit cards and vulnerable users.

When it comes to ATM and debit card fraud, the situation can escalate depending on when you report the crime.

Time is of the essence, and based on the directives of the Electronic Fund Transfer Act, that oversees ATM and debit cards, if you’re a victim of fraudulent activity, it’s imperative that you file a report within two business days to ensure a refund from your bank, minus the liable amount of $50.

However, if it takes two to 60 days after the card was stolen or lost, before you alert the bank, your liability goes up to $500, and it gets worse if you exceed 60 days, as customers will be left without the option of a refund since banks aren’t mandated to reverse fraudulent charges.

The only similar characteristic that links debit or ATM cards with credit cards is the assurance of a full refund if the customer is in possession of the compromised card, but the 60 day time limit still applies for debit and ATM cards, while credit cards are exempt from those rules.

The last couple of years were blissfully devoid of the nefariousness that leaves you anxiety-ridden from triggers that you worked hard to defeat, with adherence to precautions that are meant to work.

But alas!

2019 is ending with two noteworthy incidents that are weeks apart, with the first one appearing in a series of text messages that confirmed orders for services rendered that I didn’t authorize.

Of course I called Chase right away, and after the exchange of information with the reps located in appropriate departments, I was left with a non-working debit card, as I eagerly awaited the arrival of its replacement.

The charges weren’t even up to $20, but the notion that someone was able to swipe my card details was troublesome. I’ve spent countless hours trying in vain to figure out how this is possible, since my online shopping is almost non-existent, and my periodic trips to the neighboring grocery and wine store are regular expenses.

It took a couple of days for the new card to arrive, and that’s because the nice customer rep at Chase was empathetic enough to bypass the standard 5–7 business days.

It’s a royal pain to reprogram a replacement card in all the applicable channels, which is why my morning chants included the plea that I wouldn’t have to go through it again.

Some weeks later, a weird text interrupted my early Sunday morning, and it was Chase, verifying that I had authorized a purchase for almost $1100. I had the option to text back “YES” or “NO.”

After shakily texting back “NO,” I received a phone call from a Chase rep, who made it clear that my card was compromised. I was scheduled to receive a replacement card, even though it wasn’t that long ago that I was in the exact same position.

I was understandably irritated at the notion that Chase Bank was seemingly incapable of providing the adequate level of security that prevents fraudulent charges from being processed by random vendors.

The patient Chase rep assured me that switching banks wouldn’t make a difference given the prevalence of active cases involving debit card fraud, across the country, which has has been steadily rising since 2017, when those occurrences increased by 10%.

When we completed identifying the unauthorized charges, her earnest advice was to refrain from using my debit card at outside ATMs that are situated at gas stations or areas that aren’t regulated. It’s best to go inside the bank and use those machines.

After doing more research, it was surprising to discover the higher risk that comes with using debit cards, compared to credit cards. And that’s because of the “better consumer protections” that gives the latter leverage over the fragility of debit card.

Also, the liability factor for victims of debit card fraud gets worse if the issue isn’t reported in a timely fashion. Regulation E determines how quickly you will be refunded, and that means waiting up to 10 business days, while the investigation is pending.

There is also the warning to limit online shopping, which is particularly hard to do during the holidays, since that’s convenient and efficient way to tackle that ordeal.

And if you have an active social life, which was my reality when Manhattan was my playing ground, you’re out of luck when it comes to guaranteeing your immunity from the virus of debit card fraud, because bars and restaurants are especially prone to those threats.

We are also supposed to avoid swiping our debit or credit cards, and rely more on the trusted “chip card technology,” that apparently stops “a lot of point-of-sale fraud.”

At the end of the day, all we have is our vigilance and the working relationship with financial institutions, that are willing to implement necessary steps to protect our checking accounts, including setting up alerts that are activated when big purchases come through.

And being obsessive about monitoring your bank accounts is the best way to spot alarming mishaps that demand immediate action.

As someone who uses her debit card for just about everything because of the inaccessibility to a branch of my bank, I am unfortunately paying the price for my preferred payment method, and my only option is to acknowledge this fact, while being extra cautious.

As we head into the next frontier, seasoned fraudsters are only going to get more feisty in their pursuits.

I’m always prepared for the next attack, and while this new normal is infuriating, the only saving grace has to be the weaponry of knowledge.

That’s the power!

Ezinne Ukoha

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Juggling Wordsmith. I have a lot to say!

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