One growing method of card fraud and theft is stealing credit card or debit cards and their PIN numbers. Unlike swiping a credit card, not all financial institutions that issue debit or credit cards offer a zero-liability guarantee to users who enter a PIN number. The idea is that the PIN number itself offers security. Unfortunately, that is becoming less true.
Today, sophisticated reader devices are attached by thieves to ATM machines, gas pumps, or other devices that accept cards. These attachments do not impede the ability for the real machine to read the card. That way, you have no idea that your transaction did not go as planned. However, your card information has been copied, and coupled with a small camera that watches you enter your PIN, the thieves have everything they need to empty your account. Although it was eventually revealed that the recent breach at Target did not compromise PIN numbers, no one was very sure of that fact in the beginning. In other words, having your card information and PIN stolen is a real risk.
MasterCard Steps Up
MasterCard announced on May 28, that it will offer (and by extension everyone who issues MasterCards) the same zero-liability for fraudulent transactions when a PIN is entered as it does for when the user swipes a card and signs. This is important news because things are getting so bad out there that customers were deciding that choosing Credit was safer than choosing Debit.
“MasterCard is also extending its zero liability policy in the U.S. to include all MasterCard PIN-based and ATM transactions. This is in addition to coverage already provided on signature debit and credit transactions. Cardholders will have greater peace of mind knowing that they are protected if their MasterCard-branded consumer or small business cards are fraudulently used in stores, online or at ATMs.”
None of this means you should be any less cautious. Reporting fraudulent transactions and cleaning up the mess afterwords is still very time consuming and unpleasant. Whenever you enter your PIN number, shield the keypad with your free hand. It isn’t foolproof, but it can block the cameras needed to capture the PIN when you enter it.
Use services like Credit Sesame or Credit Karma to keep an eye on your credit score as well. Credit Karma has free credit monitoring that will send you an email whenever something negative goes on you credit report. This is too late for most people, but it’s better than having no notice at all.
Most important of all is to monitor all of your financial accounts closely. Immediately investigate any charges you don’t recognize. Thieves will often make a small, innocent looking transaction in order to test your account. So, don’t ignore that coffee purchase from across town just because it’s “small.” If you do suspect fraud, notify your card issuer immediately. Have them cancel the card and issue you a new one. Since you don’t want to be caught without any cards while your new ones are being delivered, this is another reason to have at least two credit or debit cards.
You can also report information to the major credit bureaus. Here are the credit bureau’s phone numbers if you need them.