Your ATM Card and Identity Theft

Man using an ATM
••• Marc Romanelli / Getty Images

Although credit cards and ATM cards (or debit cards) work similarly at a store's point-of-sale machine (POS) and ATMs, there are some differences between them. And if you're a victim of identity theft, there's one main difference that can mean losing your own money instead of the bank's.

A Costly Difference

When you swipe a credit card at the grocery store or gas pump, the credit card company pays the bill and lets you pay them back over time. If someone steals your credit card they can rack up a huge bill, and you'll probably spend a lot of time and energy trying to clean up the mess. Otherwise, you may get reported to credit bureaus—Experian, Equifax, or TransUnion—and have a hard time getting credit in the future.

But the important thing to remember about credit cards is that when you use them, you are making a promise to the credit card company that you will pay them back. In other words, you technically aren't spending your own money yet when you use them.

That's not the case with debit cards.

Since a debit card or ATM card is linked directly to your bank account, you're paying for your purchases right away—even if your card has been stolen. If someone steals your debit card, they have direct access to your bank account and funds. And once your money is gone, you may have a hard time getting it back.

If you report that your credit or debit card was lost or stolen before it's used by a thief, then you're usually not held responsible for unauthorized charges.  An Identity theft protection service can help you flag any unexpected activity and handle communication with your bank or credit card company on your behalf.

Low-Tech ATM Scams

Some identity thieves use low-tech approaches. One example: Trying to steal your ATM card by putting a piece of plastic or glue in the card slot. This can cause the ATM to repeatedly ask for your PIN, making it easy for someone to look over your shoulder while you're typing it in.

With the glue in the card slot, the card may get stuck in the ATM. The identity thief is usually standing behind you waiting to use the machine. When they see the trouble you're having, they become very helpful and say something like, "This machine always does that. Just type in your PIN three times and it will release your card." Of course, this doesn't work, so they offer to watch the machine while you go get help. As soon as you're out of sight, they will pull a pair of tweezers or needle-nose pliers out of their pocket, snag your card, and go shopping.

Obviously, if you are having trouble with an ATM machine or your card gets stuck, be cautious who you trust if you have to walk away from it. A security guard or police officer is usually your best bet.

High-Tech ATM Scams

Card "skimming" is a popular way for identity thieves to get your ATM card information. Sometimes they put a device on the ATM machine itself. The skimmer looks like part of the machine and can be tough to spot. When you put your card into the machine, it passes through the skimmer first. When your transaction is done you get your card back none the wiser.

The identity thief will collect the skimmer later, and your card number with it. Or, the skimmer may have a miniature Bluetooth device. If this is the case, the identity thief doesn't even have to collect the skimmer but just get close enough to download the information. More recently, skimmers have been found on gas pumps as well.

Common Sense Tips

  • Don't trust anyone else with your card. If you hand it to a cashier, waiter/waitress, or customer service rep, keep them in sight. And remember, if you let someone else use your card and they spend more than you wanted them to, it will be almost impossible to get your money back from the bank. Even credit card companies will make you pay for an authorized user "overspend."
  • Don't trust a stranger. Good Samaritans still exist, but many identity thieves will pose as someone willing to help in a time of need.
  • Use a credit card instead. It's a bit easier to tell the credit card company you are going to pay a bill that it is to get your money back from the bank, even with the laws that are in place to protect consumers.
  • Look around for cameras. If you can see a camera where you're using your card, chances are good a would-be identity thief will be on film placing a skimming device. This doesn't guarantee safety, but identity thieves tend to be camera shy for obvious reasons.
  • Use trusted ATMs. Your best bet is to use the machines at your bank. Another bank is your best second choice. Use stand-alone ATMs only when you have to.
  • Your phone is your friend. Storing the phone numbers for your bank and credit card companies on your phone lets you contact them immediately when something happens to your cards. Communication is the key to dealing with your bank if it happens to you.