Photo illustration by Matt Weir / The Collegian
Scammers take advantage of debit cardsâ€™ popularity
Americans are increasingly using debit cards for purchases, many times without knowing the potential risks.
Using a debit card for purchases immediately withdraws money from a connected checking account, leaving users vulnerable to instant theft in a scam known as skimming.
According to Consumer Reports, skimming is an unauthorized capture and transfer of payment data to another source and occurs when equipment captures the magnetic strip and keypad information once a PIN is inputted at ATM machines, gas pumps, restaurants, or retailers.
Debit cards are expected to account for nearly 60 percent of purchases made with plastic in 2009, according to a report by Consumer Reports in July 2009.
By 2010, the U.S. Census Bureau projects that 185 million Americans will be debit cardholders. This is an increase of 9 million cards from the 2006 total, when there were only 176 million cardholders.
The 2010 projection of total cardholders indicates that individuals may hold more than one card. It is projected that there will be an increase of 130 million cards by 2010, a total of 484 million Visa and MasterCard debit cards, compared to the 2006 total of 354 million cards.
Precautions are being taken at California State University, Fresno.
â€œSince skimming typically involves an â€˜inside dishonest employee,â€™ all association employees go through a fingerprinting process and a background check if their job duties require handling of cash or other forms of payment,â€ said Debbie Dehner, an Auxiliary Corporations employee at Fresno State.
â€œWe follow strict guidelines that have been set by the Payment Card Industry (PCI) in the processing and handling of all credit or debit card transactions,â€ Dehner said. â€œWe also work very closely with our credit card processor, First Data, in updating our current credit card terminals.â€
Dehner said that a physical inventory is maintained on all terminals, including make, model, serial number and their locations. These details allow for monitoring transaction activity by location in the event that there is any allegation of inappropriate activity.
These security measures are especially important considering the Census Bureauâ€™s most recent projections.
The Census Bureau estimates that in 2010 there will be 40.953 trillion point of sale (POS) transactions, 14.9 trillion over the 2006 total of 26.053 trillion POS transactions. A POS transaction is one that immediately deducts money from your account.
An estimate for total purchase volume to be made with debit cards in 2010 is $1.6 trillion, a $600 billion increase from 2006. And according to Consumer Reports, debit transactions are susceptible to scams in ways that credit cards are not.
Unlike credit card thieves, who usually charge merchandise and then resell it to come up with money, people who create counterfeit ATM or debit cards by stealing your PIN and other account data can simply pull cold cash from your bank account, according to Consumer Reports.
Managers and employees of University Market, located on the southeast corner of Shaw and Willow avenues, said they are well aware of debit card skimming scams. To ensure that debit card skimming does not occur at this facility, meetings are held to educate employees about what to look for when cleaning equipment, refilling supplies and helping customers daily.
The store is open 24 hours, and there is ongoing surveillance from several locations. Therefore, the store is never left unattended by employees, who could promptly address suspicious characters and issues that may occur.
â€œCameras are deterrents,â€ University Market manager Chris Benjamin said.
â€œPeople are able to get into the system through working for pump repair or pump installation companies,â€ Benjamin said. â€œYouâ€™re not going to see it as much because of new systems.â€
If fraud did occur, Benjamin said that University Market is prepared with phone numbers for fraud response hotlines.
The manager of Dog House Grill, Matt Billingsley, said that they have never experienced debit card skimming. The only type of plastic accepted by the restaurant is credit, and identification is checked with each card, Billingsley said.
The computer system used by Dog House Grill employs top of the line security for credit card theft and only shows the last four digits of a credit card number.
Billingsley said that the only way a server could obtain a full card number is if they wrote the number down while handling the customerâ€™s card.
Any incorrect usage of a card, such as not checking ID or using the wrong card in a transaction, results in employee termination, Billingsley said.
â€œAs a restaurant, we pride ourselves on customers using their credit cards and that it is indeed the card owner, knowing every time a person uses a card it was as if we were using our card,â€ Billingsley said. â€œWe want the same protection.â€
Dehner advises individuals to keep an eye on their debit card, to keep their receipts and to compare them to their bank statement at the end of each month.
â€œStudents, faculty and staff need to be aware of the possibility of all types of credit and debit card scams, including skimming,â€ Dehner said. â€œAn informed and knowledgeable public plays a significant role in preventing these frauds.â€
Consumer Report shares these recommendations to help you avoid getting scammed.
Don’t type your PIN at the pump. Instead, identify your card as a credit card. That way it will be processed through a credit card network, and you will have greater protection.
Use ATMs located at banks. Attaching and retrieving a device used for scams is more likely to happen at a non-bank setting.
Closely monitor your bank accounts. Debit card fraud can have a greater impact on your finances than credit card fraud. If you notice suspicious activity on your accounts, report it to your bank immediately.