What Is Pinless Debit Fraud (and How Can You Protect Yourself)?
“They ordered flowers and something from eBay and now I don’t have a debit card for Christmas!”
That’s the frantic text I received from one of my friends when she found out her debit card was compromised and used to make a fraudulent purchase online. Luckily, she caught it early because she had a mobile banking alert set up on her phone and will be getting a refund from her bank on the fraudulent purchases as well as a new debit card. Unfortunately, it will take a few days to get the new debit card in the mail and the timing isn't good.
I do my banking with TD Bank; a great feature is they can print you a new debit card my local branch on the spot.
But here's the problem, something like this isn't supposed to happen with debit cards in the first place. When ATMs first came out, you could only access the money in your bank accounts with a PIN – a 4 digit number unique to every debit card. Now, though you can swipe your debit card at many places without a pin for transactions under $50 and you can make much larger purchases with a signature. While this is much more convenient it does open some new opportunities for security issues and fraud.
Since most of the time these transactions don’t require you to give up your card to the cashier (or are done online where there is no person checking) there isn’t even a signature match performed. This can lead to pinless debit card fraud or fraud that uses a debit card to make purchases without the pin and without your permission. This, of course, can cause massive financial stress, pain, and worry.
With that in mind here are several steps you can take to do as much as you can to protect yourself against pinless debit card fraud or act on it quickly if it does happen to you.
9 Ways to Protect Yourself Against Pinless Debit Fraud
1. Watch Your Accounts
The longer you let fraud linger, the harder it is to get a refund on any fraudulent transactions made with pinless debit card fraud (or any other kind of fraud). But if you report any suspicious transactions as soon as they occur (the quicker the better) then you can get a resolution quickly at most banking institutions and protect your assets.
The downside is that in many cases you won't get the money back immediately; the bank will need to conduct an investigation and you could go for several days waiting for a new debit card.
2. Sign up for Text/Email Alerts
This doesn’t substitute for checking your bank account online, but it can help. Many banks and credit unions offer text and email alerts to let you know when there is unusual activity in your account. It won’t catch a fraudulent purchase at the local Walgreens if that’s where you normally shop, but it will catch a purchase in California if you normally live in Ohio.
As mentioned above, you can set up many different types of mobile banking alerts to notify you of every single transaction that occurs, as they happen in real time, so you can immediately spot an unauthorized transaction made on your account.
These last two tips focused on ways you can identify and detect fraud quickly; now let's take a look at ways you can prevent fraud from happening in the first place.
3. Guard Your Cards Like Cash
You wouldn’t leave cash hanging out in the open. Don’t do that with your debit cards either. You should guard your debit cards just like you do with cash. Keep them secure and in your possession at all times.
4. Don’t Lend Out Your Debit Cards
It can be tempting to give your kids or a trusted friend your debit cards to make a quick purchase. But don’t. Anyone can copy your card information and use it online to do a pinless debit purchase. It’s not worth letting your card information get out into the wild.
And while you're at it, you should be sure to use a separate pin number for all of your cards.
5. Never Send Your Account Info Through Email or Chat
Your bank will never email you asking for your debit card numbers, but people engaged in phishing scams to get your account info and use it fraudulently will. Don’t give that info out over email, ever.
While you may use chat for customer service and they may ask you to verify certain pieces of information; generally, they'll never ask you to give out your entire account number or entire social security number to verify your account information.
6. Don’t Click Links in Banking Emails
Scammers are great at making fake emails and fake sites, a type of email phishing scam. Never click a link in an email from your bank. Always navigate to your bank by typing in their address in your browser. That way you’ll make sure that you don’t end up giving up your information to a fraudulent site.
7. Never Use Public Wifi Networks to Make Online Purchases
Scammers can skim public wifi networks and steal your card information to then make pinless debit purchases in their own names. Avoid this by using secure connections when purchasing online. Never use public WiFi networks for online banking.
8. Check for Secure Websites
Anytime you make a purchase or visit your bank’s website online check to make sure that you have an https:// connection (and not just http://). The web address should read like this: https://yourbankinginstitution.com. That “s” at the end of the https means that you have a secure connection with the institution you are doing business with.
9. Use a Strong Password for Online Banking
If people can get into your online banking account then they can get access to all kinds of banking information – including a new debit card. Don’t use 123456, password, or your loved one’s birthday for your password. This invites trouble. Instead use a secure password with varied numbers, letters, and characters.
The Bottom Line on Pinless Debit Fraud
Pinless debit fraud can’t always be prevented, but by keeping an eye on your accounts and using the above tips you can help to keep yourself safe. If you do end up having fraudulent transactions, then you can report them quickly and get them resolved as quickly as possible to minimize the financial disruption in your life.