Fraud… we hear a lot about it today, but do we really understand how it is impacting us daily? We hear something in the news and do not really think a lot about it sometimes.
The other day, I filled my car with gas. I pulled out my trusty credit card, put in my zip code, and filled up my car. Easy, right?
I never gave much thought to anyone being able to do anything with my card information at a local country store just getting gas. After all, the store owner was inside smiling as usual, and the typical patrons who sit around and tell daily ‘fish’ stories were there too.
So, the surrounding seems safe enough. But, someone apparently put a skimmer on the gas pump, and they were able to get your card information! To be clear, it was not the owner of the station but someone else who placed the skimmer on the pump. After all, the pumps are outside, and anyone can get to them.
Before I got home (I live 2 miles away), I received a text from my bank asking me if I was trying to make an online purchase from Wal-Mart in Arkansas. So, the fraud departments at banks are doing a good job and trying to prevent fraud for all of us, so be patient with them!
Fraudsters take us for billions (yes, that word is plural) of dollars each year. And, a lot of that money either is not caught by us and we pay for it, or we report the charge as not being ours to the bank. Then, the bank has to either go after the merchant for the money (which honestly, was far and few who gave a credit), or the bank had to pay by writing off the loss and giving us the credit.
So, you may think you should just write checks. As Frank Abagnale said in a conference I attended, “Why would you give your checking account number and possibly your full name, address, and some of you still have your social security number and phone number on the check, to a perfect stranger?”
Mr. Abagnale believes that because punishment for fraud and recovery of stolen funds are so rare, prevention is the only viable course of action.
With a credit card, if you see a charge you did not make, you need to immediately notify the merchant for a credit. If the merchant does not agree, you need to notify the bank (check your bank provider of the timing) typically within 60 to 90 days in order to be credited back for the charge.
The bank will go back to the merchant and make them prove the charge is correct and/or give a credit back for the charge
On October, 2015, the liability shifted and helped push chip and pin cards out in the market. Meaning, the liability is now on the merchant if someone uses your card, and they have not properly identified you.
So, when you see a merchant who does not have a chip reader yet, or they do not check when you insert the card and do a signature, they are at risk, not you. Now I know you grumble when someone says chip and pin, but let me explain those types of cards and how chip and pin are helping.
There are 2 types of credit cards out in the market today – a regular magnetic strip card and a combo magnetic strip and chip card. Now to be clear, all ‘chip’ cards are not created equal.
What do I mean by a ‘chip’ card not being the same, as we all now have this shiny new square thing imbedded in the card, right? You will notice when you get to a POS (point of sale) terminal to pay for a transaction, when the merchant has a ‘chip’ reader terminal, you insert the card into what we in the card world refer to as a ‘dip’ machine.
When the transaction goes through, in the United States, it will either:
Just go through and nothing else happens for identification;
Will prompt you for a signature;
Will prompt you for a pin. Overseas, you typically will be all chip and pin enabled.
I know there are rumblings when people have to stop and ‘dip’ the card rather than just swipe it, but there is a real reason behind all of this painful procedure.
If you just either swipe your card as you always have, then the clerk should ask for your ID and compare it to the signature on the back of the card. However, most clerks do not do this simple security measure, and anyone can take your card and pay for an item.
Ok, you have a chip, but you sign your name. Again, the clerk should check your ID to ensure the name on the card is the person who is using it. But, sadly, most do not check an ID. Again, anyone can take your card and make a purchase.
You are prompted for a PIN. This is really good, because I could take your card, but if I do not know your PIN, then I cannot make the purchase.
You will see more merchants, as time goes on, fully embrace the chip terminals, and as more banks get their full chip and pin technology embedded in the card, then your protection will go up!
However, very recently, Brooke Rogers from Channel 11 in Dallas/Fort Worth news channel reported since chip and pin was launched, the fraud transactions have moved from POS (point of sale) transactions to online transactions. So, our online purchases, which do not have a verification system, are more at risk than ever!
Increases of 16% in 2015 and 40% in 2016 of online transactions have now been the fraud target.
So, here are some tips to keep in mind to keep your money safe.
Stop writing checks unless you know the person (company), or the check is going directly to a bank.
Debit card transactions sometimes are protected while others are not. Check with your bank. Some banks will give you credits back and others will not.
When using a debit card to get cash out of an ATM or gas station, be careful of skimmers that steal your card information.
Credit cards are better to pay for items
Be careful of online purchases. Fraud can easily happen to steal your information. Look for the secure lock symbol on the screen for protection.
Find out what coverage you have from all of your bank cards.
Get identity theft monitoring.
I actually have a rider on my homeowner’s policy to protect me from identity theft.
For those of you that have had your identity stolen, you know how hard it is to recover. Be aware, be vigilant, and be smart about your money. If something does not look or feel right, it probably isn’t. If something sounds too good to be true, it probably isn’t either.
Robin Anderson earned her BBA and MBA from Averett University and graduated with a 3.88 GPA. She is also a member of the Pinnacle National Honor Society and a member of the Institute of Financial Operations as well as served on the Strategic Advisory Committee for several years and has been a speaker for 4 years at the National Convention. Robin volunteers her time with organizations such as the American Cancer Society, the ALS Association, and speaking for Averett University. Contact
Photo Credit – 3112014