“There’s a lot of talk going around about debit and credit card fraud. How can I safely use my cards without worrying about losing my money in one of these scams?”
Last week we compared some of the features of debit and credit cards. Both cards provide a convenient alternative to paper money, and remove the risk of shopping with cash. However, the fact that these cards provide electronic access points to your money can present an even bigger security challenge for card users.
Developments in technology can sometimes be both beneficial and detrimental. Scam artists and thieves have the capability to use hi-tech methods to get information from your cards that can allow them to steal your money. Let’s look at three major ways that these scams can be carried out:
Skimming
Skimming is the use of an electronic device called a skimmer to capture your account information from your credit or debit card. Your card is swiped through the skimmer, which can be a small hand-held device, and the information contained in your card’s magnetic strip is stored.
It’s very easy for skimming to be done. When you hand over your credit or debit card at a restaurant or in some stores, do you see what the agent is doing with your card? It’s a simple procedure to scan your card twice, once to pay your bill, and then into a skimmer.
Once your card details are captured the criminals can sell your information to other people, use your card number to make online transactions, or even clone your card to produce a brand new card.
Your best defense against skimming is to watch carefully what the agent is doing with your card when you present it for payment. If possible, don’t let the card out of your sight.
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Card Trapping
Another version of skimming can take place in the ATM. There are instances where criminals go into the ATM and insert a card trapping device into the card slot. This can be as simple as a piece of tape that prevents you from getting back your card out of the machine, or sophisticated as a skimmer that copies the information on the card.
Some scams work by the thief pretending to be an agent of the bank and asking you for your PIN in order to help you complete the transaction. Other scams use cameras to try to pick up your PIN as you enter it in the machine.
To protect yourself in the ATM, always check the card slot for any signs of tampering before inserting your card. You can also cover the key pad with your other hand while you enter your PIN.
Phishing
‘Phishing’ is the act of sending an email dishonestly claiming to be a legitimate business in order to scam the user into submitting account information. The email usually sends the user to a fake website where they are asked to input sensitive information like bank account numbers, PINs, and passwords.
According to www.webopedia.com, the term came from the analogy that scammers would send e-mail lures to ‘fish’ for financial data from internet users. Since hackers had a tendency to replacing “f” with “ph” the term ‘phishing’ was born.
You may receive an email with a message like this: “During our regular verification of accounts, we couldn’t verify your information. Please click here to update and verify your information.”
Never open these emails, as your bank won’t request sensitive information online, as the internet is not secure. To help remove these hoax emails, install anti-virus software on your computer and update them frequently.
With all these hi-tech methods of defrauding card users abounding, what are the financial institutions doing to help protect its customers?
Audrey Tugwell-Henry of Scotiabank revealed that the bank has an active fraud monitoring department that keeps constant watch on the card transactions of its clients. There is a sophisticated system in place that tracks patterns of card usage, and any extraordinary activity is immediately queried with the customer.
Tugwell-Henry advised that it was very important for customers to check their statements upon receipt in order to verify all transactions. If there is an item that is in dispute, you should write to the bank stating the full details, and each issue will be settled on a case by case basis depending on the circumstances.
If you suspect fraudulent use of your card, or if your card is lost or stolen, you should immediately call the card centre so that your account can be blocked.
If you have access to the internet, you should also sign up for online banking, so that you can review your bank statements regularly instead of waiting thirty days for a statement. That way, you can immediately see unusual or fraudulent activity on your account before too much damage is done.
Copyright © 2006 Cherryl Hanson Simpson. No reproduction without written consent.
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Originally published in The Daily Observer, December 21, 2006
Cherryl is a financial columnist, consultant and coach. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl