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Debit card fraud
Old 09-29-2016, 10:06 AM   #1
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Debit card fraud

DW went online Tuesday to look at her USAA checking account balance and discovered several fraudulent transactions. Apparently someone had copied her debit card and on Monday withdrew $400 from two separate ATM locations, used it to buy gas, pay for lunch and purchase a couple of items. The total damages were just over $1,000. All the transactions took place in a city 200 miles away - she hasn't been there for more than a year.

A quick call to USAA's fraud department resulted in issuing her a new debit card and an assurance the fraudulent transactions would be reversed. As of this morning all of them had been credited back to her account.

I've told her for years she shouldn't use her debit card for anything other than withdrawing cash from an ATM but she continued to use it at retail merchants, even while we were traveling. I think that will stop now - she even admitted I had told her so without me having to say it. In a phone conversation with DD#1 she said, "Your father told me not to do it. You know how much I hate it when he's right!"
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Old 09-29-2016, 10:09 AM   #2
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Sure, but how often does it happen?
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Old 09-29-2016, 10:09 AM   #3
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Good thing she was checking her account regularly - and nice of USAA to credit the account so quickly.

I do not like debit cards.
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Old 09-29-2016, 10:10 AM   #4
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I am not a big fan of debit cards for this very reason. I use mine only as an ATM card.
If you're traveling or in need of short term funds, a situation like this would turn into a big hassle. With a credit card, you at least are not giving criminals direct access to your bank account.
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Old 09-29-2016, 10:33 AM   #5
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How does someone copy a debit card and a pin number so that they can use an ATM machine? could it have been a mis-posting problem on the banks end? Or perhaps some internal fraud?
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Old 09-29-2016, 10:39 AM   #6
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A quick call to USAA's fraud department resulted in issuing her a new debit card and an assurance the fraudulent transactions would be reversed. As of this morning all of them had been credited back to her account.
That was my experience as well, the one time when I had a fraudulent charge on my debit card (back in 2000 or 2001). Actually the money was back in my bank account the same afternoon I reported it. Mine is a debit Mastercard, and according to the fine print in the debit Mastercard agreement it has the same fraud protections as the Mastercard credit card that is also offered by my bank.

That said, now that I have my first credit card (an Amazon Visa card) I use it almost all the time instead of my debit card, so that I can get rewards points. My debit card is almost entirely unused except at the ATM these days.
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Old 09-29-2016, 10:42 AM   #7
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I too use my debit only for ATM cash. HOWEVER, much to my surprise when buying groceries at a store that only takes cash or debit, I found out my debit card had been "cancelled/suspended" by my bank. When talking to my bank branch personnel, I learned they turn-off customers debit cards if not used at least once every six month.
Oh, they also did not bother to mention this little policy to their card holders. . Even the personnel at my branch were unaware of this procedure until finding out what happened.
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Old 09-29-2016, 10:55 AM   #8
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How does someone copy a debit card and a pin number so that they can use an ATM machine? could it have been a mis-posting problem on the banks end? Or perhaps some internal fraud?
Good question. DW asked the fraud folks at the bank how the fraud took place and was told it was probably some sort of skimmer that captured both the card number and the pin (seems far-fetched to me, but what do I know), or maybe a security breach at a retail merchant.
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Old 09-29-2016, 11:08 AM   #9
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We are on our second martini here in Spain as our Visa card was just hacked for $27,000 and it took a lot of security questions to get it locked and stopped. Their first draw was for $3000 from a California location. You would think using a chip and a pin there's no way they would be able to hack your account but there you go. It seems to happen no matter where we go in the world. That's why we have several credit cards I guess and debit cards. Our fidelity debit card was denied twice which made me worried until I realized you have to use a multi bank ATM to make withdrawals.

I always worry more about the debit cards them the credit cards.


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Old 09-29-2016, 11:10 AM   #10
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In a retail location, a camera placed above the card reader or an observant sales clerk at the retail counter is enough to get the PIN. Copying the card number at the same time usually means the merchant (or an employee) is in cahoots, or a clever skimming device is being used.
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Old 09-29-2016, 11:16 AM   #11
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How does someone copy a debit card and a pin number so that they can use an ATM machine? could it have been a mis-posting problem on the banks end? Or perhaps some internal fraud?
Skimmer. It captures the number and the pin. In Denver they show up at gas stations, light rail ticket kiosks, lots of places.
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Old 09-29-2016, 11:21 AM   #12
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We've had several instances with skimmers in my town. I don't use pay at the pump any more nor do I use my my debit card.


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Old 09-29-2016, 11:22 AM   #13
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Originally Posted by REWahoo View Post
DW went online Tuesday to look at her USAA checking account balance and discovered several fraudulent transactions. Apparently someone had copied her debit card and on Monday withdrew $400 from two separate ATM locations, used it to buy gas, pay for lunch and purchase a couple of items. The total damages were just over $1,000. All the transactions took place in a city 200 miles away - she hasn't been there for more than a year.

Just curious, was your wife's USAA debit card from Mastercard or from Visa?

The reason why I'm asking is because USAA is switching their debit cards over from MC w/o a chip, to Visa with chip & pin.

DH and I received our new USAA Visa debit cards in the mail a couple of days ago (we use the debit cards only for ATM transactions).

Dunno if that would have made any difference in your wife's case, though.
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Old 09-29-2016, 11:24 AM   #14
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Just curious, was your wife's USAA debit card from Mastercard or from Visa?
It was her old Mastercard debit card. She got her new Visa card last week but hadn't made the switch.
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Old 09-29-2016, 11:25 AM   #15
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wow - you are lucky you got the $$ back - I thought there was no fraud coverage on debit cards, that's why banks are pushing them
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Old 09-29-2016, 11:27 AM   #16
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Quote:
Originally Posted by Rosie View Post
Just curious, was your wife's USAA debit card from Mastercard or from Visa?

The reason why I'm asking is because USAA is switching their debit cards over from MC w/o a chip, to Visa with chip & pin.

DH and I received our new USAA Visa debit cards in the mail a couple of days ago (we use the debit cards only for ATM transactions).

Dunno if that would have made any difference in your wife's case, though.
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It was her old Mastercard debit card. She got her new Visa card last week but hadn't made the switch.
That may not have made any difference. Not all merchants are taking chip cards. A fraudulent chip card can be used at the gas station, and when it passes muster, another few quick purchases before it is cancelled.
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Old 09-29-2016, 11:28 AM   #17
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wow - you are lucky you got the $$ back - I thought there was no fraud coverage on debit cards, that's why banks are pushing them
You are absolutely wrong. You need to read the agreement for your debit card, and that will tell you what fraud coverage you have, if any. Don't go by "scare journalism".... read the contract.

Quote:
Originally Posted by Rosie View Post
Just curious, was your wife's USAA debit card from Mastercard or from Visa?

The reason why I'm asking is because USAA is switching their debit cards over from MC w/o a chip, to Visa with chip & pin.

DH and I received our new USAA Visa debit cards in the mail a couple of days ago (we use the debit cards only for ATM transactions).

Dunno if that would have made any difference in your wife's case, though.
As for chip and pin, my debit card has chip & pin if needed but can also be swiped since most places don't seem to be able to handle chip & pin yet. So, it doesn't seem to make much difference.
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Old 09-29-2016, 11:29 AM   #18
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You are absolutely wrong. You need to read the agreement for your debit card, and that will tell you what fraud coverage you have, if any. Don't go by "scare journalism".... read the contract.
happens sometimes .....I need to go to the bank today anyway to exchange my debit card for one with a chip in it - I'll ask for the agreement
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Old 09-29-2016, 11:30 AM   #19
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wow - you are lucky you got the $$ back - I thought there was no fraud coverage on debit cards, that's why banks are pushing them
Some of it is time dependent. The longer you wait to report it, the more you're on the hook for.
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Old 09-29-2016, 11:31 AM   #20
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From the WSJ: Fraud Worries: Debit vs. Credit Cards - Total Return - WSJ

Quote:
With debit cards, the CFPB says that “if an unauthorized transaction appears on your statement (but your card or PIN has not been lost or stolen), under federal law you will not be liable for the debit if you report it within 60 days after your account statement is sent to you.”

The rules are different if the card or PIN has been lost or stolen: Report the problem within two business days and liability is limited to $50 of unauthorized charges. Then the maximum liability rises to $500.
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