You can prevent your money from being lost by taking action immediately if you are a victim of debit card fraud.
Debit card fraud is quite common. According to Mercator, a consultant in the payments industry, 39% of debit card holders have been victims of fraud within the last 12 months. When someone uses your debit card number, or your personal identification number (PIN), to make unauthorised purchases or withdraws from your account, it is called fraud.
The most popular payment method is debit cards. They are ahead of credit cards, cash, and mobile apps. Debit cards are easy to understand. They allow you to pay transactions online quickly or in person and don’t require cash. You don’t have to worry about racking up debt because debit cards take money out of your checking account.
This article will explain how debit card fraud occurs, who is responsible for it, and what to do if your debit card has been compromised.
How does debit card fraud happen?
Perhaps your debit card was stolen on the bus home. No matter what the reason, debit card fraud can happen to anyone.
Thieves have the ability to steal your debit card number or physical card, as well as your PIN and digital card number, to buy things online or transfer funds from your checking account. You have several options to gain access to this information:
- Lost or stolen cards – A lost or stolen debit card refers to the physical card that is taken from you. This could be due to theft, loss of your card while shopping, or simply because your wallet has been taken.
- Hacking —Hackers search for weaknesses in company’s securities systems and install malicious code to gain access to customers’ debit and credit card numbers.
- Skimming —Skimming refers to criminals installing illegal devices at gas pumps, ATMs and other point-of sale terminals that record debit card numbers as well as PINs.
- Phishing and Spoofing — These practices are where thieves pretend to be a trusted source such as a relative or business with fake email addresses or websites. They will try to convince you to send money, provide your debit card number, or download software.
- Spying — Criminals may convince you to install spyware or malware by telling compelling stories about celebrities and software. Clicking on the link will install spyware or malware on your computer. This can track your computer usage and record keystrokes. It can also steal your bank details and debit card numbers.
Are banks responsible for debit card fraud?
You may wonder if your bank is responsible for paying the cost of unauthorized transactions if your debit card information has been compromised. The speed at which you report a stolen or lost debit card will determine your financial responsibility and the bank’s obligation.
Federal law provides protections to limit your losses. However, these protections are only applicable if you act promptly. Let’s look at what happens if your debit card gets lost, stolen, or compromised.
- You account information has been used but your debit card is not lost or stolen. You are not responsible for any unauthorized transactions so long as the problem is reported within 60 days of receiving your bank statement.
- You lost your card or it was stolen. However, no unauthorized transactions were made. If you report the loss or theft of your debit card before any transactions take place, you won’t be held responsible for any future losses.
- Report a stolen or lost card within two days of its disappearance. The maximum amount that you can be held responsible for is $50
- Report a stolen or lost card within two days of learning about it, but no later than 60 days after receiving your statement. The maximum amount you are responsible for is $500.
- Report a stolen or lost card within 60 days of receiving your statement. You are responsible for any unauthorized transactions and fraudulent activity on your account.
What should you do if your suspect that you are being charged with debit card fraud
Regularly reviewing activity on your bank accounts is a smart idea. Contact your bank immediately if you notice fraudulent transactions or withdraws on your account. Most banks and credit unions have fraud alert teams that are available 24 hours a day, so you don’t need to wait until the card is lost or stolen.
The charges will be investigated by the bank within 10 business days. If the transaction is deemed unauthorized, the bank will usually refund the money within three business days.
The bank will close your checking account if you report a stolen debit card and may issue you a new card.
If someone uses my card, can I get my money back?
Your losses will be limited to $50 if you report debit card fraud within two business days after realizing that your information has been compromised. You may be held responsible for any or all charges if you delay.
To ensure your bank balance and account security, report any lost or stolen cards as soon as you can.
Unfortunately, debit card fraud can happen. However, there are ways you can protect yourself.
- Sign up to multi-factor authentication Multi-factor authentication requires two or more credentials for your bank account. It may ask you for your PIN or a code that was sent to your mobile phone.
- Get a credit card — Credit cards offer greater consumer protections than debit cards.
- Sign up to receive security alerts Many banks offer fraud alerts. They will notify you by email or phone about suspicious activity on your account.
- Keep an eye on your accounts Security alerts can be helpful, but it’s a good idea to regularly review your accounts to identify any suspicious transactions.
- Check ATMs and card readers for skimmers — When using an ATM or card reader to check for damage, such cracks or loose parts, inspect the terminal. Don’t use the device if there are any problems.