While many consumers still like to use paper money and coins, more and more people are pulling out credit or debit cards to make purchases. And, as the popularity of payment cards has grown, so has the number of criminals trying to steal very valuable details, including the cardholder’s name and the card’s account number and expiration date, which are printed on the card itself as well as encoded (for machine readability) in the magnetic stripe or a computer chip.
“No matter how your card information is stored, it is in high demand by criminals who would like to retrieve that data to create a counterfeit version of your card or use the information to make purchases online or over the phone,” said Michael Benardo, manager of the FDIC’s Cyber Fraud and Financial Crimes Section.
If you’re ever the victim or target of credit or debit card theft or fraud, catching it fast and reporting it to your card issuer are key to resolving the situation. And while federal laws and industry practices protect consumers in these situations, there are important differences depending on the type of card.
In general, under the Truth in Lending Act, your cap for liability for unauthorized charges on a credit card is $50. But under the Electronic Fund Transfer Act, if your debit card or ATM card is lost or stolen or you notice an unauthorized purchase or other transfer using your checking or savings account, your maximum liability is limited to $50 only if you notify your credit union within two business days. If you wait more than two business days, your debit/ATM card losses under the law could go up to $500, or perhaps much more.
What else can you do to keep thieves away from your cards…and your money?
Never give out your payment card numbers in response to an unsolicited e-mail, text message or phone call, no matter who the source supposedly is. An “urgent” e-mail or phone call appearing to be from a well-known organization is likely a scam attempting to trick you into divulging your card information. It’s called “phishing,” a high-tech variation of the concept of “fishing” for account information. If they get confidential details, the criminals can use the information to make counterfeit cards and run up charges on your accounts.
Take precautions at the checkout counter, ATM and gas pump. “Be on the lookout for credit and debit card reading devices that look suspicious, such as a plastic sleeve inside a card slot,” Benardo said. “Crooks are getting very good at attaching their own devices over legitimate card readers and gathering account information from the cards that consumers swipe through those readers.”
Also be alert when you hand your payment card to an employee at a restaurant or retail establishment. For example, if he or she swipes your card through two devices instead of one, that second device could be recording your account information to make a fraudulent card. Report that situation to a manager and your card issuer.