Five Types of Debit Fraud and How to Protect Yourself from Them

Kate Robinson
Greater Nevada Credit Union
The recent Target card breach, has, like famous card breaches before it, shone a spotlight on the possibility of debit card fraud for many Americans.
While credit and debit cards are praised for many reasons, criminal activity is getting more sophisticated, while technology used for making purchases continues to evolve. For those reasons, it’s more important than ever to be aware of possible scams and use caution with your cards.

Below is a list of the most common forms of debit card fraud, along with some helpful tips for protecting yourself from each one.

1. Good old-fashioned wallet theft: I know I just said that criminals were getting more sophisticated, but I’d be remiss to overlook the most basic form of theft: pick-pocketing. This crime is one of the easiest to pull off, and probably the most rewarding. Your wallet or purse is like a little hub of personal information, often containing your ID, credit and debit cards, social security cards, medical insurance cards and all kinds of other valuable stuff. has some great information on protecting yourself before and after a theft, which I will summarize briefly here:

To Prevent Theft

  •  Don’t carry all your cards at once. Only carry what you know you’ll need.
  •  Never write PIN numbers or passwords on anything in your wallet, including the cards.
  •  Don’t carry your Social Security card in your wallet, or list the number on any of your other cards or documents.
  •  Keep a record of all the contents of your wallet or purse. Photocopies are awesome.

After Theft

  •  Find out what’s missing as soon as possible and call your card issuers or other relevant parties immediately to notify them of the theft.
  •  File a police report.
  •  Contact the credit Bureaus (Experian, TransUnion, and Equifax ).
  • Monitor your account activity online and study your monthly statements carefully.
  •  Review your credit report and dispute any discrepancies.

2. Credit Card Skimming: A common tactic for thieves is to tamper with hardware, especially gas station debit and credit card terminals, and ATMs. They install credit card skimmers on the terminals that are difficult to detect, which capture data from the magnetic stripe on your credit card. If you enter your PIN number at the pump, the skimmers capture that data to make a fake debit card and withdraw money from your account at ATMs or make purchases.

Another version of credit card skimming can occur at restaurants when criminals working as servers carry pocket skimmers that allowed them to capture customer information while cashing out the check.

Here’s how to protect yourself from card skimming:

  •  Use cash (bonus: it costs less to use cash at the gas station).
  •  If you use the card terminal, run credit transactions (never enter your PIN).
  •  Withdraw cash from the teller at your bank or credit union, rather than the ATM, or make a habit of using the same ATM machine regularly so you’re familiar with how it works and looks.
  •  When using an unfamiliar ATM, examine it closely.
  •  Never use an ATM if there are strangers lingering in the area.
  •  If your card is confiscated at an ATM, call your bank immediately without leaving the area.
  •  If you pay with a card at a restaurant, watch the server closely – never let the card out of your sight.
  •  Monitor your account activity carefully. 

3. Major Security Breaches: Like the Target breach, data security breaches are becoming more common as thieves target large repositories of data, as opposed to individual debit cards. These ones are more difficult to protect yourself from. However, there are still precautions you can take:

  •  Constantly monitoring your account activity (noticing a pattern here?).
  •  Reporting anything suspicious immediately.
  •  Check out this article for more information. 

4. Phishing Scams: Your phone rings, or you receive a text message or email, claiming to be from your financial institution, and asking you to call immediately to “verify” your debit card information. These scams play on your fear of debit card fraud, indicating there may be something wrong with your account that requires immediate action, and thereby bilk you into literally giving a thief your debit card number. I know what you’re thinking: “How do these people sleep at night?” Great question. Let’s assume they don’t, and move forward with how to protect yourself from these creepy scammers:

  •  Don’t ever, ever, ever, ever for any reason ever, click on a link in an email asking for your debit card information (or any other personal information for that matter).
  •  Don’t call them back.
  •  Don’t give your personal information to anyone over the phone or by email.
  •  Call your financial institution (using the contact information on your financial institution’s web site) and notify them of any suspicious communications you received. Your bank or credit union will absolutely never text you, email you, or call you, asking for your debit card number. 

5. Online Shopping: Online shopping is super convenient and wonderful and I love it for many reasons and do it often. But it can also be dangerous. Hackers are extremely sophisticated and unscrupulous. Think about how many of your friends’ email accounts, Facebook accounts and other accounts have been hacked. Sending your financial information out into the Internet can be scary! If you’re an avid online shopper, here are some tips to keep your info safe:

  •  Disposable cards – Reloadable cash cards or gift cards are a great way to avoid giving anyone access to your bank account. You load them with a specified dollar amount, and then enter the card information while shopping, just like you would with your credit card. But it’s not tied to your banking information and the amount that could be stolen is finite.
  •  Verify the security of the website by checking the URL. It should say https:// instead of http:// if it’s a secure site. Also look in the lower right corner of the browser window and find a little padlock icon.
  •  Don’t click on a link in an email offering you a deal. Instead go directly to the merchant’s website and look for the deal there. Additionally, don’t shop there at all if it’s a company you’ve never heard of or done business with before.
  •  Don’t store your credit card information online. It can be convenient to have your credit card information on file with companies you do business with, but it’s safer to re-enter it every time, than to leave it vulnerable to data breaches.
  •  Don’t use the same password at every website you have an account with.
  •  Designate one device in your home for online shopping and don’t use that device for the rest of your web browsing.
  •  Install ad-blocking and extensions on your web browser and antivirus software on your machine.
  •  Establish fake answers to security questions such as the common “mother’s maiden name” question (but don’t forget the answers!).

Some other great resources for your protection are listed below: