Debit-card scams: more frequent, more aggressive

Debit card fraud is on the rise as debt-wary Americans move away from credit cards to debit cards. Beware these five frequent scams.

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    In this Nov. 2, 2009, file photo, a customer swipes a MasterCard debit card through a machine while checking out at a shop in Seattle. As Americans switch from credit to debit cards, scammers are becoming more aggressive. And victims are potentially liable for up to $500 in fraudulent losses on the cards, 10 times the level for credit cards.
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The call might start something like this: “I’m Mike from Visa. Did you make a purchase for a laptop in Cambridge, Mass., for $987 with your Bank of America debit card?”

“No. What happened?” The consumer is now concerned.

“I just want to let you know that somebody has stolen your card information. Feel free to call the 800 number on the back of your card.”

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Mike confirms the consumer’s name, address, and telephone number. He offers to take care of the situation by canceling the card and removing all the fraudulent charges. All he needs is the three-digit security number on the back of the card in order to reactivate the account after the fake charges are removed.

That’s the key to the latest debit-card scam – the security code.

Once “Mike” has it, he can easily withdraw all the money that is in the debit-card account while his victim mistakenly believes the problem has been resolved. Increasingly aggressive, con artists are taking debit-card fraud to a whole new level. And because they’re preying on debit cards, instead of credit cards, victims are more at risk.

Debit-card rules allow issuers to hold consumers responsible for up to $500 in losses if they don’t report the problem within two business days. (Credit-card holders are limited to $50 in losses.)

Con artists have other tricks up their sleeves to get debit card numbers, personal IDs, and security codes, according to Roman Shteyn at Credit-Land.com. The five most common techniques:

  1. Keystroke-logger. This is computer spyware that records every keystroke typed on a computer and is used to steal confidential personal information and passwords.
  2. Cellphone. A bystander distracts you while a scammer uses the camera built into his cellphone to snap digital pictures of your name, your credit card, and the expiration date. Criminals may also place tiny cameras on or near ATM machines in a bank lobby to record your data when you make a withdrawal.
  3. Skimmers. Clever scammers work in restaurants, gas stations, and other establishments. One trick is planting a card-reader in the register. Skimmers steal info like your address, telephone pin, etc.
  4. Card-switchers. When you are at a restaurant, card switchers steal your card and give you back a fake card or expired one.
  5. Phishers. Scammers send fake e-mails designed to convince you to give up your bank card information.

The solution: Protect your card number and personal information. For example, read your monthly bank statements carefully for unauthorized withdrawals. When in doubt about a suspicious phone call or unknown charge, call the issuing bank immediately. For some protection against spyware, turn off your computer when it is not in use.

RELATED: 7 ways credit cards are better than debit cards

Use the same level of care when using the card. Whenever you are at the gas pump, use a credit card instead of a debit card. Using a debit card without a personal identification number is dangerous because a thief can use the receipt to gain access to your account and drain it before you are aware that anything is wrong.

At a restaurant when your card is handed back, make sure it’s yours before you put it into your wallet.

With more Americans switching from credit cards to debit cards to avoid racking up debt, their vulnerability rises because they’re using real cash to pay for something, according to a Credit Land analysis comparing credit card and debit card fraud protection.

It may be fast and easy to change an infiltrated debit card account number, but getting your money back … that’s another story. In contrast to dispute resolutions for credit cards, the study finds that the process for debit cards can involve a lengthy investigation and a drawn out process for getting your money back.

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