Debit cards are now the most commonly used payment method, with 54 percent of consumers
using either a physical or virtual debit card to pay for goods and services. (1) Debit cards allow you to pay for transactions quickly and easily, but because they deduct funds directly from your linked bank account, debit cards present both benefits and risks. On the plus side, you don’t run up debt, which might happen with a credit card, and you don’t need to carry much cash. However, fraud is always a danger, since you run the risk of someone tapping into your bank account. In the first two quarters of 2023, the Federal Trade Commission Sentinel Network received over 38,000 fraud reports where a debit card was used as a payment method by fraudsters. This resulted in a total loss of over $106 million for consumers. (2)
When someone gains access to your debit card number, they can make unauthorized purchases or withdraw cash from your account. If they obtain your PIN (personal identification number), it’s even easier to gain access to your funds. Fraudsters have many different methods of obtaining your information: (3)
Stolen or lost cards – You lose your card while shopping or someone steals your wallet with your card in it.
Hacking — Hackers install malicious software to get access to customer debit and credit card information from retailers.
Skimming — Criminals install illegal devices at ATMs, gas pumps and other point-of-sale terminals that record debit card numbers and PINs.
Spoofing and phishing — Thieves imitate a trusted source, such as a family member or well-known company, with fake emails or websites. They convince you to download software, give
them your debit card number, or send money.
Spying — Criminals post compelling stories on social media or send emails that entice you to click on a link. Then, spyware is installed on your computer to monitor your computer use and even record your keystrokes, giving thieves your bank and debit card details.
How can you reduce your chances of becoming a victim?
Monitor your accounts — Review your bank accounts on a regular basis to see if there are any transactions you don’t recognize, and double-check all transactions when you get your bank statement.
Sign up for banking alerts like Nevada State Bank’s Mobile Fraud Alert Service — If the bank detects something suspicious on your NSB credit or debit card, a text message is sent to your mobile phone asking if the transaction is fraudulent. All you have to do is text back “Y” or “N.” “N” if the purchase is not fraudulent, “Y” if it is. If you text “Y” to indicate it’s not your purchase, the bank will text you a number to call to validate outstanding charges, prevent
further purchases, and start the process of getting you a new card. Click here to find out more or sign up.
Go paperless — Signing up for paperless bank statements will prevent criminals from stealing bank statements from your mailbox. Shredding statements and debit card receipts when you're done with them will significantly reduce the possibility of having bank account information stolen from your trash.
Don't make purchases with your debit card — Use a credit card, which offers greater protection against fraud. Since it isn’t connected to your bank account, fraudsters can’t access those funds.
Be careful at ATMs — Use bank ATMs whenever possible, since they tend to have better security than ATMs at convenience stores, casinos, and other places. When using an ATM, be on the lookout for anything unusual that might indicate a device was placed on top of the keypad, and make sure no one is looking over your shoulder as you enter your PIN.
Watch out for scams — Beware of the phishing and spoofing scams described above, and never give out personal or banking information over the phone or online.
Use a secured network — Don't conduct financial transactions online in a public place or over an unsecured network. It is relatively easy for criminals to hack into a network in a coffee shop or office building and steal your information.
Sign up for multi-factor authentication — With multi-factor authentication, banks require two or more credentials to log into your account. For example, the bank may ask for your PIN and a code sent to your phone.
What to do if you become a victim
If your debit card information is compromised despite your best efforts, and fraudsters make
unauthorized transactions, your financial responsibility and the bank’s obligation depend on how quickly you report a lost or stolen debit card.
Federal law offers some protections that limit your losses, but they only apply if you act in a timely manner. For example. If you report a lost or stolen card within two business days, the maximum amount you can be responsible for is $50, but if you don’t report it until more than 60 days after your bank statement is sent to you, you are responsible for all the transactions made by the criminals.
Be smart about debit card use, and if you have any questions or concerns, contact your local NSB branch.
1. https://www.forbes.com/advisor/credit-cards/credit-card-statistics/
2. https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/FraudLosses
3. https://www.creditkarma.com/money/i/debit-card-fraud