Debit ATM Card Fraud

Kevin McCormally: I am Kevin McCormally of Kiplinger's and I am here with Janet Bodnar, the Deputy Editor of Kiplinger's Personal Finance Magazine to talk about debit card fraud and how to protect yourself. Janet, there have been some well-publicized cases likely of debit card fraud where people's bank accounts are wiped out by people using their cards at the ATM machine. What's going on?

Janet Bodnar: What's going on is something called skimming Kevin. What you have got is crooks, scam artists who are actually putting their own equipment on the card readers that you find at checkout counters and that sort of thing so that when you swipe your card, instead of going into the database of the store where you are shopping, it goes into the crook's database. They get your number.

Kevin McCormally: Okay. I know when it comes to credit cards you have federal laws that protect consumers. So are there protections for debit card users?

Janet Bodnar: There are, but they're not quite as stringent as they are for credit card users and with credit cards your maximum liability is going to be 50 bucks. With the debit cards, under certain circumstances, your maximum liability could get as high as $500 or more depending on when you report a loss.

Kevin McCormally: Is there any way I can protect myself from this?

Janet Bodnar: Yeah, sure you can. What happens actually in real life is that a lot banks do give their debit card customers the same protections as they give to the credit card customers and sometimes that's zero liability, you don't have any liability whatsoever, but you need to check with your bank on that.

Kevin McCormally: Any other precautions I should be taking as a debit card user?

Janet Bodnar: Yes you can. For one thing, don't use ATM machines that are unbranded and some type of things that you would find in a convenience store, for example, because those are very, very subjected to this type of fraud. Another thing is always check your debit card statements when they come in and if you have any indication that there is an unauthorized charge or if you can't find your card, report it immediately, don't waste any time.

Also, if you have the opportunity to sign for purchases that have punching in your number, do that and if you are going to punch in your number, it doesn't hurt to stand in front of that card reader, so that people can't peer over your shoulder or if there is a hidden camera somewhere they are not getting a clear view.

Kevin McCormally: Great advice Janet, thank you!