Thieves are becoming more creative and dangerous in the ways they steal information from your debit and credit cards. They are using skimmers, shimmers and tiny drills to steal your savings and run up your credit card bill.
Crooks use stolen card information to charge items on fake credit and debit cards, buy goods online, and sell your private data online.
Your debit card is especially at risk. Many credit cards have a zero-liability policy. In the event of fraud, you are not responsible for payment. A credit will often be reflected on the monthly statement shortly after a determination that a thief perpetrated the charge.
The law is less protective of debit cards. Your liability on a fraudulent transaction is limited to $50 if you report the transaction within 60 calendar days after receiving your account statement. That can rise to $500 under certain circumstances and possibly to the full amount if you don't report the fraud within the 60-day period.
In a cat-and-mouse game, financial institutions have made it more difficult for crooks to steal your data. Chips have largely replaced the magnetic strips on the back of cards as the primary way of using card readers.
Thieves have switched tactics, accordingly, putting shimmers inside card readers. These very slim, nearly invisible devices read the data from a card chip, mimicking the way a skimmer reads a card strip. They use chip data to clone the strip.
The other trick – and this is becoming increasingly popular – is to drill holes in the contactless payment screen at gas stations, rendering them useless. That forces customers to swipe their cards into the skimmer secretly installed into the card slot.
Another tactic: When a buyer uses a card enabled with contactless technology, thieves use a scanning device to capture the airborne signal while it is transmitted from the card to the reader. The captured information is then used to commit fraud.
How can you protect yourself against tech-minded criminals?
- Use chip technology. EMV (Europay, Mastercard and Visa) chip technology is difficult for skimmers to compromise. Security researcher Brian Krebs explains in a blog post that "Although the data that is typically stored on a card's magnetic stripe is replicated inside the chip on chip-enabled cards, the chip contains additional security components not found on a magnetic stripe."
- Regularly monitor your accounts. Don’t wait for a monthly statement to check on recent transactions from your credit and debit accounts, especially if you have been traveling and using your cards at businesses you don’t know. Immediately alert your bank or credit card company of transactions you do not recognize.
- Better, set up account alerts. Configure your accounts so that you will receive a notification via email or text for transactions above a specified amount. You will likely have to log into your account to set the parameters. Do so only on a secure internet connection.
- Use contactless payments, wisely. Mobile payment apps like Apple Pay, Google Pay and Samsung Pay use tokens for added security. Sensitive payment data are replaced with a unique, random set of characters. That information is useless to thieves.
- Inspect card readers, especially at gas pumps and ATMs. Before inserting your card into the reader, examine it closely. Look for unusual or loose parts, attachments, or overlays on the slot. If something appears out of place, don't use it and report it to the establishment.
- Secure your wallet and cards. Keep your wallet safe, and don't leave it unattended. Consider using a wallet that blocks RFID (radio-frequency identification) signals to prevent contactless card skimming.
- Cover the keypad: When entering your debit card PIN (personal identification number), use one hand to shield the keypad from prying eyes or hidden cameras. Extra tip: Some thieves use heat sensors to see afterward which buttons you pressed. After the transaction clears, press your hand on all the buttons.
- Beware of gas pump skimmers: Besides checking for tampering, use a credit card instead of a debit card because of the legal protection against being held financially liable for fraud. You can also pay the station cashier, whose card reader is less likely to have been compromised.