CHFCU News

Visa Debit Card SCAM Alert!

A recent skimming scam has forced blocking of transactions by members using debit cards at POS or ATMs in New York, as well as online transactions with companies based in New York.

ALERT: If you want to use your CHFCU debit card for online purchases from companies based in New York, or you will be traveling to that area, please contact Nicole at 865-541-2118, nlay@chcu.com. She will lift the block temporarily (24 hours) upon receipt of an email or fax (865-541-2580). If you are traveling in the New York area, or abroad, and plan to use your CHFCU debit card, please contact the credit union prior to departure.

Three steps to take to protect your account data from getting into the wrong hands.

When you use a debit card, the money is immediately taken from your share draft (checking) account. While using debit guarantees that you pay as you go, these cards have downsides, including a growing appeal to thieves. "As economic conditions have worsened, there's been a noticeable increase in all types of card fraud," says Avivah Litan, an analyst specializing in fraud detection and prevention at Gartner Research in Stamford, Conn. "But ATM and debit-card fraud is the top area of concern we're hearing about from banks and credit unions all over the world."

Unlike credit-card thieves, who usually charge merchandise and then resell it to come up with money, people who create counterfeit ATM or debit cards by stealing your PIN and other account data can simply pull cold cash from your account. Using a technique known as skimming, they set up equipment that captures magnetic stripe and keypad information when you input your PIN at ATM machines, gas pumps, restaurants, or retailers.

Here's how you can protect yourself:

Don't type in your PIN at the pump Be especially vigilant at gas stations, Litan says. "Gas pumps are notorious for skimming because they're produced by only a couple of different manufacturers, and if someone gets the key to one from a disgruntled employee, they can insert a skimming device inside the pump where it can't be seen," she says. She recommends using a credit card rather than a debit card when you fill your tank.

If you must use a debit card at the gas pump, choose the screen prompt that identifies it as a credit card so that you do not have to type in your PIN. The purchase amount will still be deducted from your checking account, but it will be processed through a credit-card network, which will give you greater protection from liability if fraud does occur. This is because card issuers typically have "zero liability" policies for both debit and credit cards, but sometimes exclude PIN-based transactions from that protection. Stick with ATMs located at financial institutions

To reduce your risk at ATMs, use machines at banks or credit unions rather than in convenience stores, airports, or any isolated locations, advises Darrin Blackford, a spokesman for the U.S. Secret Service, which investigates financial crimes involving interstate commerce. "A thief has to be able to attach and retrieve a skimming device to use the data it's gathered," he says. "And that's more likely to happen in nonbank settings where there's less traffic and no surveillance cameras."

That doesn't mean that FI ATMs are immune, however. In August 2008, Wachovia Bank reported that several debit-card "identities" were stolen when a skimming device was placed on an ATM at a branch in Cape Coral, Fla."It's often hard to spot skimmers," Blackford says. "But if you notice a change at an ATM you use routinely, such as a color difference in the card reader or a gap where something appears to be glued onto the slot where you insert your card, that's a warning sign you'd want to report to the financial institution that owns the machine."

Closely monitor your accounts

Check them regularly, preferably online rather than waiting for monthly statements to arrive in the mail. Federal law limits your liability for fraudulent debit-card charges to $50, but only if you report the theft or loss of your card or PIN within two business days of discovering the problem. If you fail to report unauthorized charges within 60 days of the date the statement listing those charges was mailed, you could be liable for any unauthorized withdrawals afterward, including the full value of credit lines or savings accounts linked to your account for overdraft protection.

Visa and MasterCard have zero liability policies that go beyond federal law by exempting debit cardholders from liability in most circumstances when a financial institution investigation confirms that a transaction is fraudulent. But dealing with debit-card fraud can have a greater impact on your finances than credit-card fraud.