Debit Cards: The New Darling of Identity Theft

MAY 20, 2011

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Would you believe there’s something identity thieves love as much as that credit card offer that’s been hastily tossed in the trash? These days, debit cards are an increasingly popular target for perpetrators of identity theft.

Between the two big debit card service providers, Visa and MasterCard, there are more than 500 million debit cards in circulation, according to statistics from And debit card transactions total in the trillions of dollars every year. With all these transactions flying around, it leaves a lot of opportunities for crimes of identity theft.

Unlike the extra layer of protection a credit card offers, a debit card gives identity thieves a direct line to your bank account. Debit card fraud takes many forms, from outright theft to subtle scams. Criminals’ tactics may include:

Capturing Your Card Numbers

Criminals now use a tactic called skimming which involves replacing the card-swiping slot on card readers or ATM’s with a device that captures your card number and PIN. To help protect yourself, use ATM’s that are inside a bank or in a high-traffic area where it would be hard for a thief to make the switch. If you must use an unfamiliar ATM, grab the swiping slot and give it a good jiggle. If it moves, look for an ATM elsewhere.

Observing Your Transaction

A person peeping over your shoulder when you use your debit card could be trying to steal your PIN. It’s an old fashioned tactic that still works – although some thieves have modernized it by using cellphones to take pictures of it. Instead, run your card as credit and forgo using your PIN at all. This strategy has the added benefit of decreasing your personal liability should fraud occur. In fact, while federal law limits your liability for unauthorized credit card transactions to just $50, your liability for debit card fraud ranges from $50 if you report the crime within two days – to $500 if it’s reported between three and 59 days. Wait longer than 60 days and you could be responsible for the entire amount of the fraud.

Impersonating Your Bank

You could receive a seemingly professional phone call from your bank representative, describing a suspicious purchase on your debit card’s activity. The thief may ask you to confirm your name, address and phone number. He or she offers to cancel the card and remove the fraudulent charges, but asks for the three-digit security code on the back of the card first – and that’s when the identity theft occurs. Once thieves have that code, they can access your account and clean it out. If you get this type of call, hang up and call the 800 number on the back of your card; that way you know you’re connecting directly to your bank.

Just as you protect your credit accounts with credit monitoring, you should take extra precautions to protect your debit card account. Always check the transaction history for unfamiliar debits, check the account online several times a week, and be cautious about where and how you use your debit card.