Debit card data theft has surged lately. According to
FICO’s Card Alert Service, the number of businesses
or ATM locations where debit cards were hacked rose
26% from 2015 to 2016. Additionally, the number of
compromised cards has steadily risen during this decade.
Crooks can attach skimmers to ATMs or point-of purchase devices in seconds. These counterfeit card readers instantly record banking data ingrained on a debit
card’s magnetic stripe. You probably have one of the new
EVM chip cards, but if you happen to insert or slide your
card through an older ATM that cannot accept the newer
cards, your data could still be at risk.
Bank rate reports that chip skimmers are now surfacing,
capable of hacking first-generation EVM chip cards relying
on static data authentication. Second-generation EVM chip
cards use dynamic data authentication, which makes data
theft more difficult – but not impossible.
What can you do to protect yourself against debit card
data theft? First, keep in mind that most skimmers are
affixed to non-bank ATMs. ATMs at gas station islands and
convenience stores are favorites for crooks, as they may
be located out of sight of clerks and security cameras.
Avoid using your debit card at such places. ATMs inside a
bank or a business with plenty of foot traffic (like a mall or
a grocery store) are less likely to be hacked.1,2
Check the ATM itself for irregularities. If there are multiple
ATMs in front of you, be careful if one card slot flashes
its acceptance light and an adjacent one does not (notify
the bank or the business hosting the ATMs). Look for
misaligned graphics or colors or evidence of prying or
looseness. Cover the keypad as you enter your PIN, and
beware of people trying to glean your PIN in the old-school
way, simply by looking over your shoulder.
Try an NFC payment if the merchant allows it. NFC
stands for near-field communications. Apple Pay, Android
Pay, and Samsung Pay all use NFC services, which
encrypt the confidential financial data stored on credit and
debit cards into symbols. This gives you another layer
of protection. Savvy consumers are increasingly using
Apple Pay, Android Pay, and Samsung Pay to buy things.
PayPal’s Android app can also make NFC transactions.2,3
If you sense your debit card has been breached, report
it quickly. If you can tell the card issuer that your card is
missing or stolen before any unauthorized transactions
occur, you will not be held financially responsible for such
transactions – that is federal law.
If you notice criminal activity has taken place, the longer
you wait to let the card issuer know about it, the less
money you may end up recovering. Report the crime
within two business days, and your maximum liability is
$50 under the federal Electronic Fund Transfer Act. Past
that deadline, your maximum liability could be as much as
$500. Wait 60 days or longer to report debit card theft, and
the missing funds may not be restored to your account at
all.
Besides notifying the card issuer, you should also tell the
three leading U.S. credit bureaus – TransUnion, Equifax,
and Experian – about any debit card data theft and
unauthorized transactions. You can file a police report,
and you can also file for an identity theft affidavit with
the Federal Trade Commission. Both documents may be
useful to the major credit-reporting agencies.
To learn more about preventing a debit card hack, contact
Patrick Schneeman at pschneeman@boulaygroup.com or
952.847.4818.
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