I was returning home from a trip last week. After picking up my luggage from the carousel and finding my car, I started my drive home from the airport. My stomach was growling as I had not eaten in several hours. I saw a McDonald's that was open and I ended up in the drive-through ordering a bottle of water and a small hamburger. What would follow would be one of the strangest experiences I have ever had in a drive-through.
Although not common, PINs can sometimes be stolen electronically
You Want My PIN? What?
The young lady at the window asked for my payment and I handed her my PayPal Mastercard (which works as both a credit or a debit card). She swiped the card and handed it back to me and matter of factly asked me for my PIN. No, she did not provide a PIN pad, she wanted me to tell her my PIN code. Although I was tired from a long day of travel back from the west coast, I had no intention of giving up my PIN. Of course, I said no and asked if she had a PIN pad. She pushed me again and again to just tell her my PIN. In the end she tossed the PIN pad out the window to me and it was not working. Maybe this was an innocent reason that she was trying to get my PIN, but who knows? I used a different card, got my hamburger and bottle of water, and arrived home about an hour later.
The next day I did call in a complaint to the corporate office of McDonald's, and I also was contacted by the local store manager. Both individuals thanked me for reporting what had happened. It made me wonder, however, how many people gave this drive-through attendant their PIN that evening and if anything nefarious had happened. I saw this story a couple of days later about a 22 year old man in Virginia that was caught with a skimming device and had cloned nearly 1,000 credit cards in just a three week period. All that he had to do was to swipe each customer's card a second time and he had an exact electronic copy. This was also in a fast food restaurant. These are the exact types of high volume locations that card thieves love to operate from.
A Debit Card Is Not A Credit Card
Being the victim of a debit card theft is a much bigger deal in most cases than with a credit card. For starters, a debit card is typically linked to your bank account, and if your account is emptied you may end up with bounced checks and a mountain of fees. Next, it could take several weeks for the bank to complete their investigation and return your money (all the while you have no access to your funds). This would leave most people in a complete financial nightmare. It is also not automatic that you will get your money back. First, you must notify the bank within two business days of the theft. If you can prove that you made the notification within this time frame, your losses will likely be limited to $50. If not, you may lose as much as $500, and if you don't notify the bank within 60 days you can face unlimited losses (these notification rules apply to both debit cards and credit cards alike).
Now, before you start feeling too comfortable with the above safeguards, keep in mind you must also not have acted 'fraudulently' or 'negligently.' As you can imagine, this opens up a proverbial can of worms. Let's assume for a moment that I had given my PIN to the drive-through worker and she later emptied my bank account. In this case I would bet that my card issuer would take the position that I was negligent and would not restore my losses. Now, if my PIN were stolen through electronic means that would be entirely different. The issue of PIN sharing seems to be commonplace among friends and family. You may give a relative your debit card and send them to the grocery store and share your PIN with them. If they get their hands on that card on another day and go on a shopping spree, there is a very good chance that your bank would not replace your lost money.
10 Ways To Protect Yourself From Credit Card/Debit Card Skimming
1. Never use a debit card when paying at a gas station pump (this is the #1 riskiest place to use a debit card). Always select 'credit' or better yet, go and pay inside.
2. Use your card as a credit card as much as possible (even when you are prompted to type in your PIN. Simply tell the cashier that you want to use the card as 'credit' and not 'debit' and they can override their system). It should be noted that fees are lower for merchants on debit card transactions. This is why you are seeing this becoming the default option in most major chains.
3. Be sure to select a PIN that is not easy for someone to guess. Using four digits from your address, your birth date, or other easy to guess numbers is asking for trouble.
4. Share your PIN at your own peril. Always realize that anyone you share your PIN with could steal unlimited money from you and you will likely have no recourse with your bank. If you have already done so, contact your bank and change your PIN right away. There is never a reason in a transaction to give a merchant or cashier your PIN. Some scams involve requesting your PIN by e mail or on a phone call (never give your PIN out over the phone or by e mail).
5. Always be sure to cover the number pad when entering your code. It may seem a bit paranoid to have to do this, but many PIN's are stolen by someone simply peeking over your shoulder or with small overhead cameras. A card skimming device can not steal your PIN, it can only clone your card. So, even if your card is cloned the thieves won't be able to use it as a debit card if you have made it impossible for them to see your PIN. You might simply use your hand to cover the PIN pad, some people will take out a checkbook or a piece of paper. This is not paranoid, but smart and necessary these days. In the case of the Target data breach, the thieves were able to also garner the PINs of the cards they had stolen. This is highly unusual and is most often impossible due to encryption.
6. Use different PIN's for different cards. It may be more convenient, but if all of your cards share the same PIN, you know what could easily happen... (no more explanation needed here).
7. Monitor your card activity. If you can opt for electronic notifications on all of your cards you will be notified by text or e mail of each transaction in real time. Alternatively, you should make a habit of logging in to your accounts at least every two to three days to review your activity.
8. When in doubt, use a card with limited space or a low credit line. Many travelers in third world countries carry a second wallet with a few dollars in it, a couple of expired credit cards, and an expired driver's license. This wallet is kept in their back pocket or purse and acts as a substitute in a robbery. A would-be-thief gets you to give up your wallet and let's you go on your way, not realizing until later that they may have pocketed five or six dollars and everything else in the wallet is worthless. If I end up at a gas pump or ATM that looks like a little odd, or if I begin to feel uncomfortable about an establishment, I will use a credit card I keep that has only $300 in total space on it. This card is not linked to my bank account and the most I stand to lose is this amount.
9. Limit the amount of money in any account linked to your debit card. Establish a separate savings account at your bank and keep only what you need in your checking/debit card account. Opt for the feature that does not approve debit card purchases beyond your actual cash on deposit in that account. Also, inquire about daily ATM/Debit limits (which will also cap your losses).
10. Know your bank's rules and policies. While many of the safeguards outlined in this article are derived from federal law and are uniform regardless of your bank, you should also know your bank's own unique policies regarding lost or stolen debit and credit cards. On this note, you should store in a separate location the 24 hour emergency number and your card numbers so you can report a theft or suspicious transaction right away. This is especially important if you need to do so at night or on the weekend when your bank's regular service number may not be answered.
The credit and debit card safeguards in place in the United States are very good. Most people would agree that there are a great number of solid consumer protections in place. All that being said, however, many people have simply abdicated their responsibilities with their credit and debit card security. Being the victim of a credit or debit card scam may be nothing more than a minor inconvenience. On the other hand, depending on the precise details of what happened, you could lose thousands of dollars and have little recourse. You may also face weeks or months of headaches before it all gets resolved.
If you have been the victim of a credit or debit card theft, or if you have your own advice to add, please use the comments section below and we can start a conversation. One interesting side note - in my upcoming book titled, Bitcoin, Digital Currency, And the Coming Mark Of The Beast, I believe that these security issues will be used to get people to willingly take the Mark in the end days.
Helping you make the most of God’s money!