Debit Card Fraud In Rockville by Temperance Blalock
Nov 18, 2009 8:39 - 9 Comments
I’m passing along this information in case it happens to anyone else around Rockville. Sharing information is a way to create awareness and protect each other from such crimes.
Yesterday afternoon I received a phone call from my bank’s fraud department informing me that someone had drained my checking account using my ATM card number. This was alarming on a number of levels, the main one being that my ATM card wasn’t lost, and that I am hyper-vigilant about shielding the keypad when I type in my PIN number. I’m also vigilant about checking my online balance almost every single day, but these transactions were done over the weekend so they didn’t show up in my account until Monday, at which point the damage had been done.
Fortunately, the transactions were “flagged” as suspicious by the bank, due to their being out-of-state and for the maximum daily amounts, and the bank alerted me. However, I was dismayed to learn that, had they not informed me right away, and had I not noticed it for more than 24 hours, I would have forfeited many of my legal consumer rights, or at least made it a lot more difficult to resolve the situation in my favor.
At this point now the bank appears to be expediting this so that I can eventually get my money back. However, I don’t know how long it’ll be until I can actually get my funds, and meanwhile I have overdue bills that are going to be delinquent. I’m lucky that I delayed bill-paying from last week, when I was scheduled to do that, otherwise I’d be dealing with a lot of NSF charges that might, or might not, have been excused.
I feel so vulnerable, mostly because I wasn’t lax or careless. I didn’t loan my debit card out, I’ve never given anyone the PIN number, and I only use the card at “legitimate” places like grocery stores and gas stations and ATM machines. All of my transactions were done in downtown Rockville. However, crooks no longer need the PIN number to do their fraud, and it’s difficult to tell whether a monitoring or “skimming” electronic device is watching a transaction.
I’m not quite sure what I could have done to avert or avoid this, other than to refrain entirely from using the debit card. Every transaction is a potential opportunity for the crooks to steal the information. When I do receive my new replacement card, I’m going to review my spending habits and make changes. I was depending on my debit card as a way of being “financially responsible”, of not charging to credit cards and not putting myself under the burden of paying interest on unpaid balances, but that’s possibly not the best strategy.
One other noteworthy thing: a lot of “phishing” scams are predicated under the fraud of scaring or frightening the consumer, using a crisis as a pretext. My first reaction, on receiving such an alarmist voicemail, was to attribute it to an actual attempt at fraud. The first thing I was asked was for my card number and my PIN number, so it was an internal battle that I should even provide that information for verification, since doing so would have opened me up to an entirely different type of fraud than was actually perpetrated on me.
Here’s a link to more details about exactly what the consumer’s liability and rights are when there’s debit card fraud.
PIRG: ATM Debit Cards
Several sobering facts:
“If the thief drains your checking account, you have to fight with the bank to get your own money back.”
“The law limits consumer liability for credit card fraud to $50. For debit card fraud, your liability is $50 if you notify the bank with 2 days of learning of the fraud, and $500 or more after two days, up to the entire amount stolen under certain circumstances.”
Here’s a link to information on exactly how the “skimming” devices’ hardware works:
How To Spot ATM Skimming and PIN Capturing Devices
Temperance Blalock
This is a contributor submission. Rockville Central encourages readers to submit pieces for consideration on all sorts of things — the more voices the better.
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Debit cards are bad for all the reasons you mentioned. I wrote an article a while back (linked in my name) about why this is true.
Credit cards are far, far safer. While I’ve never had any consumer debt, I do have a number of credit cards in my name for things like rewards and other benefits. I’ll generally get a fraudulent charge on one of them every six months or so; it’s usually a matter of 15 minutes or less to resolve the entire situation, and I never have to pay a dime on those charges. Much easier than chasing down money after it disappears from your checking account. Imagine if you had $1,000 in your checking account and an outstanding check for $600. If a scammer hit your debit card for $500, that legitimate check would overdraw you for $100, and you’d get socked with an overdrawn fee that you’ll have a very hard time getting back even if you prove fraud.
Wow. sobering news. Makes me think its better to use a credit card and be better fraud-protected. Of course my bank, Chevy Chase, was just bought by the credit card nazis (a.k.a. Capital One) and credit cards everywhere have been moving up fees and rates for everybody, even those who pay their bills regularly.
I’m thinking this may be a good idea: TWO checking accounts, and only use one of them for a debit card. Move money online when you need it. Seems like a real pain, though.
Speaking of banks….anyone ever notice how ridiculously long it takes to deposit a few checks in person. Banking has gotten MUCH easier by using online payments and debits, but doing anything AT the bank takes forever. Even CDs. I can buy a CD online in a snap, but I can’t buy a CD online at Chevy Chase. I would have to go in-person, sign forms, and then get rewarded with an interest rate far below what is available elsewhere. If I couldn’t walk there, I probably wouldn’t bank there.
Temperance, I’m so sorry for this. It’s terrible that you became a victim, despite your careful planning and review!
As a student in the County Citizens’ Police Academy, we learned some of the many ingenious ways criminals work to steal our identities and our money.
Special care should be taken in online donations or shopping; use a credit card with a low limit or a faux number generated online (my credit card company offers this service) for one purchase only.
This is probably obvious, but be sure to shred all financial information including credit card offers that come in the mail.
Nick: Even worse than having one outstanding check for $600, having five outstanding checks for $50 apiece is even worse, since the overdraft fee is charged per missed transaction, rather than by the amount of the transaction.
Andrew: You are so right about the difficultly of doing business in-person at a bank. Today I went to my local branch to discuss the fact that I was using their ATM machines recently, and it was almost bizarre to be speaking to an actual person, after years and years of online-only banking. I can’t remember the last time I went to a bank teller and wrote a check for “cash”, but I’m going to be doing that in the near future.
Cheryl: I thought I was being very cautious in shredding anything that had my name or address on it, even if it was just a magazine-cover label, but that wasn’t enough to protect me. I will continue to shred, though.
This certainly is a bad situation, Ms. Blalock. It’s a “blame the victim” satiation. Not only did you have to get into a “tug-of-war” with your bank, but you had to go through all the hassles of trying to get this straightened out. Thank you for writing this piece, though, as you were kind to point out the dangers of debit cards for those of us who are familiar with at least some of them and to others who might not be familiar with their dangers.
When our daughter began her first year of college, this fall, we opened a checking account for her, through our local bank, which has a special kind of checking account for college students, and does not charge the college student with making more than the normal amount of ATM withdrawals from banks other than the local bank. By using the local bank, we also keep business locally/regionally and it makes it easy for us to deposit money into our daughter’s checking account. What I did not like, however, was that the only kind of ATM card the bank now offered has a debit card attached to it. When I showed the bank officer my ATM card, which is just an ATM card, without a debit or a credit card attached to it, the bank officer said that the kind of ATM card, which I have, is no longer made for new bank customers, like my daughter. I thought to myself, if I don’t feel safe keeping a debit card, I certainly don’t think it’s a safe idea for my daughter to have a debit card. However, we went along with it and completed opening the account with the ATM/debit card. While I tried to caution my daughter about some of the dangers of debit cards, which you pointed out, I got the feeling that she wasn’t very interested in what I was saying, and probably rightfully so, as she was more interested in getting ready to leave for college. In hindsight, we should have opened a regular checking account for her, several years before she went away to college. However, today, I e-mailed her the URL link to your Contributor Opinion, Ms. Blalock, in the hope that my daughter will let the dangers of debit cards “sink in.” I am certain, despite the difficulty this has and is causing you, Ms. Blalock, that you have and are helping others to limit or avoid some of what you are going through, and for that, I thank you.
There’s another pitfall to debit cards, which banks don’t tell consumers about and can be hurtful, particularly to people who don’t keep large balances in their checking accounts, from which the debit cards are attached. It is this: when a purchase is made with a debit card, the retailer, service provider, etc. puts a “hold” on not only the amount of the purchase but a “hold” on an amount larger than the amount of the purchase, to be sure the retailer, service provider, etc. gets paid, i.e. to make sure there’s enough money in the buyer’s checking account to cover the purchase and any other purchases that are pending. For example, if you buy $25 of gasoline, using a debit card, chances are good that the gasoline seller will put a “hold” on an amount that is more than the $25 of gasoline you just bought, say a “hold” of $35. Well, if a person doesn’t have much money in his/her checking account and makes several purchases, using a debit card, in a fairly short time, there can very easily be a lot more money on “hold” than is in the checking account. Then, the checking account holder gets charged with overdraft fees or the debit card gets rejected, even though there is enough money in the person’s checking account to cover the amount of the purchases.
While we bailed out the banks, when they supposedly needed it, it doesn’t seem like the banks are being held accountable, on some important consumer issues. Your experience, Mr. Blalock, and others’ makes me wonder if perhaps we don’t need some legislation to reverse what has been and is being done to consumers.
I got scammed this week, too. Tuesday morning my visa check /debit card was rejected at Home Depot. I figured it was their scanner. Then in the evening at Giant - Re-Jected again! The next morning I called B of A and after ten minutes to get a live person, then another few answering lots of security questions, we got to the bottom of it. Someone had been trying to use my card all over the internet - about a dozen transactions within about 24 hours. But none were approved - the person didn’t have my card so they couldn’t provide the “security code” that’s printed on it. Wild, huh? And a few weeks ago, someone tried to use an old credit card I never use anymore on the internet - that bank called me and inquired. I think the thing to do is check your accounts everyday for odd stuff. With on-line banking is so easy to do.
My how dependent we have become on plastic. As a small business owner in Rockville, I have watched my “cash” register over the years (30) swing in the way folks pay, as the economy changes with charges going to 95% in the good times
. I too have and use my own credit cards but pay a substantial amount each month for the privilidge of accepting customers’ credit cards at my register. It’s a per sale amount plus a percent of the sale. I’m not sure what this benefits me but the folks who have no cash for their 3 cricket purchase, cost me for the transaction.
What would the card companies do if we all just paid cash?
Banking on-line and having a debit card can certainly be very convenient. However, caution must be taken to manage both.
Paying bills using the Internet On-line banking service and having a debt card eliminates writing checks and carrying cash. My parent’s live in Florida and I handle all their bills. Although, my mother has a debit card, it scares me if she lets her neighbors use it for buying her groceries since she no longer drives. To monitor the spending Bank of America allows me to set up alerts to notify me when a transaction is made. I find this perfect for our needs because I know immediately when my mother’s debt card is used and it documents where the card was used. There is also a limit how much cash can be withdrawn from the ATM machine each day.
To manage my parent’s account I control the amount of money in the checking account. Once the account is low and a bill is due, I transfer funds from a savings account. All the utility bills are also paid on-line and few checks need to be written.
Hearing of the experience of fraud so many times should keep us vigilant with closely monitoring our accounts. Hard earned money needs to be safeguarded by each individual. We have to remember carrying debit and credit cards is like having your money with you for immediate use. Protect them and keep them home if you do not plan to use them.
Ruth,
the cleaners I go to simply has a sign…$15 minimum for credit cards. Seems fair. They’re a small business and set a reasonable policy.
Another way is to simply charge more and offer a discount for cash. It gives customers a warm feeling to save money like that, kind of like the warm feeling I got by paying my paving contractor in Benjamins and saving $600 on my driveway job. Checks and credit cards are so 2005!