Blogs

Although online attacks, social engineering and check fraud are on the rise as top fraud trends, fraudsters are also making the naughty list and continuing to scam consumers with two classic schemes – debit card and ATM fraud. Plastic cards are still an access device to someone’s account at a financial institution and finding ways to compromise a card can create trouble for an account holder. Though the EMV chip has successfully reduced counterfeit card creation, fraudsters still find ways to wreak havoc on the debit card network and ATMs, such as:

• Injecting malware onto card reading operating systems.
• Inserting hidden cameras, card skimmers or phony deposit receptacles onto existing ATMs.
• Creating phony ATMs.
• Stolen debit card and PIN numbers.
• Identity theft.
• Hacking devices or applications with debit cards stored.
• Scams or social engineering.

So, what can you do as a financial institution to help prevent debit card or ATM fraud events from occurring this holiday season and beyond?  Here are some tips:

• Inspect your ATM(s) daily. Add reviewing your ATM(s) to your opening and closing procedures, specifically looking for anything out of the ordinary.
• Ensure that the latest operating system is on your ATM(s) and that patches are regularly installed. 
• Clear and review ATM deposits daily.  If not reviewed daily, the chances increase of the deposited funds being withdrawn and not recovered due to check return timelines. 
• Educate account holders on safeguarding their debit cards and personal identification numbers. Advise them to not write their PIN numbers on the back of their cards.
• Inform account holders on scams and social engineering and advise clients that non-fraudsters will not call to ask for debit card, PIN or account information.
• Educate account holders on where to use their debit card, such as trusted online sites and trusted in-person locations. For online purchases, recommend that account holders have commercially reasonable security installed on their computer units.
• Work with card processors/issuers on the process of reviewing fraud scores of purchases and merchants to be reviewed for possible fraud trends.
• Consider adding instant issue to your institution. Debit cards sent through the mail can be intercepted and then used fraudulently.
• Have a sound cardholder dispute process in place to review valid disputes.
• Remember that an access device attached to an account is a privilege, not a right.  If an account holder has safeguarding issues and/or disputes often, the financial institution does not have to agree to continue offering a debit card. 

There are also many tips you can pass on to account holders to help them avoid debit card or ATM fraud:

• Use ATMs with caution. ATMs owned by banks or credit unions, or provided ATMs, are the most trustworthy. But you should always inspect the machines yourself to observe any additional cameras or fraudulent card readers attached to a machine.
• Protect your physical debit card at all costs.  Keep it safely tucked away and not in plain view for others to see or steal.
• Protect your PIN number.  Don’t give it to anyone, cover up your hand when entering it and don’t ever write it on the back of your debit card. 
• Be careful with online purchases.  Have commercially reasonable security on your computer, but also be cautious of the websites used for entering account information.
• Have unique passwords for any websites, applications or smartphone devices where your debit card and/or personal information is stored. Change them regularly. 
• Review your account statement daily via your online banking access or your financial institution’s app.  Turn on alerts, too, for any purchases.  Report any peculiar transaction activity immediately. 
• Realize that nobody would ever contact you directly for your account information via phone, email or in-person visit.  The card is yours alone to use at your discretion.
• Watch out for scams that request funds or a bunch of gift cards to be sent somewhere due to a reason with a “sense of urgency” claimed or someone acting as a law enforcement or computer technician imposter.  Gift cards are not accepted as bail money, for example. 
• Do not click links or attachments in emails from unfamiliar senders.
• Avoid ever sharing your debit card info via email.

There are many other preventative measures out there to consider, as fraudsters evolve on new ways to steal account information or access devices.  A best practice is to always be suspicious on your own behalf, and look out for friends, family, co-workers and others whom you suspect are falling for a fraud scheme (shoutout to my friend @Karen Sylvester for this advice).  A fraudster only needs to convince one person to engage in their scheme, but together, we can help each other avoid losing money, time and peace of mind. To learn more, consider joining us February 13^th for our Debit Card & ATM Crash Course webinar.