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4 risky places to swipe your debit card

No, your debit card is NOT the same thing as your credit card. For one, it doesn't afford the same protections in the case of fraudulent charges.

By Smart Spending Editor Aug 28, 2013 6:01PM

This post is by Claes Bell of partner site

MSN Money PartnerWould you give a thief direct access to your checking account?

Image: Cash machine (© Compassionate Eye Foundation/Getty Images/Getty Images)No? Unfortunately, you may be doing just that by regularly using your debit card. Debit cards may look identical to credit cards, but there's one key difference. With credit cards, users who spot fraudulent charges on their bill can simply decline the charges and not pay the bill. On the other hand, debit cards draw money directly from your checking account, rather than from an intermediary such as a credit card company.

Because of that, even clear-cut cases of fraud where victims are protected from liability by consumer protection laws can cause significant hardship, says Frank Abagnale, a secure-document consultant in Washington, D.C.

He cites the example of the TJX Companies Inc.'s data breach that exposed the payment information of thousands of customers in 2007. The incident resulted in $150 million in fraud losses, and much of it was pulled directly from customers' bank accounts. While credit card users got their accounts straightened out and new cards in the mail within a few days, the case created major problems for debit card holders who waited an average of two to three months to get reimbursed, Abagnale says.

While debit card fraud is always a possibility, being careful where you use it can help keep your checking account balance out of the hands of criminals.

1. Skimming ATMs

The idea that outdoor ATMs are among the most dangerous places to use a debit card seems a little bit absurd. But some ATMs present a perfect opportunity for thieves to skim users' debit cards, says Chris McGoey, a security consultant based in Los Angeles.

Skimming is the practice of capturing a bank customer's card information by running it through a machine that reads the card's magnetic strip. Those machines are often placed over the real card slots at ATMs and other card terminals.

"Any transaction you do outdoors at an open ATM is going to be higher risk exposure," McGoey says. "If the public has access to it, then someone has the ability to add skimming devices to it, position cameras on it and position themselves in a way where they could surveil it."

He says you're better off using an ATM inside a retail outlet or other high-trafficked, well-lit place.

Julie McNelley, senior analyst for Aite Group LLC, a Boston-based financial services research firm, says even the card terminals that card users must swipe to get into ATM vestibules are being used as a skimming site by criminals. You can spot ATM skimmers by checking for ATM components that look beat-up or askew, she says.

2. Gassing up

Gas stations are another danger zone for debit card use.

"You go to a gas station and you stick your debit card in there, and you swipe it through a machine," Abagnale says. "I'm sitting across the street with a laptop and an antenna. I put a skimmer in there, and I'm picking up all the information. Before you even get home, I've debited your account."

Gas station payment terminals have many of the characteristics card fraudsters love, McNelley says.

"In a gas station where you do have a whole bunch of pay-at-the-pump kinds of things and minimal supervision, it's pretty easy for a bad guy to put a skimming device on and put a little pinpoint camera there and compromise debit cards that way," McNelley says. Thieves often use small cameras to capture footage of debit card users entering their PINs so they can have free access to their money.

She says even if the thief doesn't manage to get your debit card personal identification number, or PIN, from such a device, he still may be able to duplicate the card's magnetic strip and use it for "sign and swipe" Visa or MasterCard transactions.

With the high potential for fraud in pay-at-the-pump debit transactions, it might make sense to use an alternative such as cash or credit cards the next time you fill up.

3. The web of deceit

Debit cards are a convenient way to buy products online, especially for those who don't like to use credit cards. Unfortunately, the Web is one of the most dangerous places to make purchases, McNelley says.

"Online is the No. 1 place where consumers should not use their debit cards," she says. "It's susceptible at so many points. The consumer could have malware on their computer, so it could be at their endpoint that the data get compromised. It could be a man-in-the-middle attack where somebody is eavesdropping on their communications via the wireless network. And then at the other end, that data goes into a database at the merchant. As we've seen with some of the higher-profile breach events over the last year or so, that data is going to be vulnerable if (they're) not properly cared for."

Aside from the potential for hacking at many different points in a transaction, Abagnale says a fundamental problem with using debit cards online is it's impossible to know who is handling your information.

"Buying stuff online, you have to be careful because you have to know who you're doing business with. When you buy things online, what always kills me about that is people say, 'This is a safe site,'" Abagnale says. "Who works there?"

4. A side of fraud?

"Would you care for a side of debit card fraud with that?"

Restaurant servers don't ask that question, but they might as well with the standard practice of taking customers' debit cards to run them behind closed doors.

"Any place where the card is out of hand" can increase the chances of fraud, says McGoey. "The guy comes to your table, takes your card and disappears for a while, so he or she has privacy," giving the person the opportunity to copy your card information.

Even restaurants without sit-down service can present a threat. McNelley says using debit cards to order delivery can be risky because cashiers tend to keep customer payment information on file. That may make future orders more convenient, but small businesses rarely take the steps necessary to safeguard payment information, she says.

Overall, she says, regardless of whether you use your debit card at a small restaurant or a big-box store, the possibility of fraud is always there. She cites the example of Michaels Stores Inc., which in 2011 saw its customers' debit card information stolen by debit card terminals doctored by thieves.

"Even if you do exercise caution … there are still the Michaels-type incidents that will happen," McNelley says.

Aug 28, 2013 7:39PM

Would have been easier just to state that people should use caution any time they use a debit card.

Just sayin'...

Aug 29, 2013 8:08AM
The article says that "the possibility of fraud is always there" .....WELL .... The possibility of theft is always there too, so I guess we shouldn't carry cash either. Seriously, the odds of getting scammed by using your debit card have to be negligible when you consider the amount of debit card transactions. There is enough fear in most of these MSN articles to make your hair turn gray.
Aug 28, 2013 10:34PM

I AM RETIRED.    The US Govt requires that I get direct deposit to a bank account or get a prepaid debit card.  My bank issued me a debit card. 


So, retired people are open-season for theft? 

Aug 29, 2013 3:32AM

a co worker used his debit card in a vending machine at work but the slot containing the goodies wasn't lined up. he attempted to retrieve the tasty morsel five times before hitting the rotation button to line up the slot. shortly after consuming his treat he checked his online account to discover he had been charged six times for the item he craved for a grand total of 18$ lol. 

some things are better with cash.

Aug 29, 2013 4:02AM
I never use a debit card. Cash only, or for a large purchase a credit card. Gas stations the same. Another thing about cash is you know exactly how much you are spending before the card is used.
Aug 29, 2013 11:03AM
It seems that there is no way a honest person is protected these days from thieves. they take your money and even if they are caught later most of them have spent your money and have no resources for collecting what is due you..... so they spend a short time in a rent free environment  and are released to do their crimes against another honest person. What kind of justice is this? I suggest you get and arm and maybe a leg.....
Aug 28, 2013 8:51PM
Debit cards are dangerous to use, period. And do not represent any advantage over using your cash instead, but with a service fee.
Aug 29, 2013 10:59AM
I see so many thumbs down on folks trying to help with common sense or logical practices. I wonder, "why is that"?  After retiring, I worked part time for a bank where  most of our time was spent with people who use debit cards and have no idea how much money they spend or how much is in their accounts. We print out their use and go over the items one by one. It is amazing that half of the expenditures are given a blank stare and then an 'oh yeah'. Debit cards are useful only if you check your balance and use daily. The same holds true with you charge cards, check daily. If you do not have a computer (you can't read this post anyway) all bank branches have a computer that a customer can use with or without a bank officer to help.
Aug 29, 2013 9:43AM
I use my debit card for airline tickets, directly with the airline and the same with hotels. I always thought if their site was https, it was secure, but now wonder if that is just a false feeling of security.
Aug 29, 2013 1:13PM
Anybody realize that Frank Abagnale in this article is the "Catch Me If You Can" guy? What a fabulous career (and one career, for a change). Way to go, Frank!
Aug 29, 2013 12:03PM
I was a victim of debit card fraud,$358.00 dollars worth,but my bank got it back for me,I will be very careful in the future!
Aug 29, 2013 3:38AM
ps my bank advised me to put anything over 2000$ into a savings account which by the way seems to be growing faster than my IRA lol life is good.
Aug 29, 2013 8:01AM

We use debit cards locally at the same places, but nowhere else. We've never used an ATM, and won't. It's not a perfect system, but our credit union is very good at tracking our accounts, and you must do business in person with negative 

balances for your credit card and your checking and savings accounts. Credit cards used only out of town, and for vacations.

Aug 29, 2013 1:18PM
I don't have a debit card.  The girl at the bank asked me about one. I told her I don't want one. I don't want an Ipad either.  I don't even want satellite television, but that is because of the "ask your doctor" ads.  I really don't care much about this computer but it does allow me an escape while the "ask your doctor" junk is on.  I could easily move back in the woods and get away from people who seem to know it all, like politicians.  We have some who come to town for their "town hall" meetings, etc. but we don't know they were here until they have already left. What kind of representation is that????  Nope, I don't want a debit card.  I'll use a check but that is as advanced as I want to become.  I want this crazy world to pass me by.
Aug 29, 2013 12:18PM
Sounds like you just shouldn't use them at all. The part with the laptop and the wireless can be used in most indoor locations as well since many of them use wireless connections.
Aug 29, 2013 9:34AM
Hey I see the under 30 crowd using credit cards to buy soda at the 7-11, they are on the balls of their asxess thanks to barry2xer, I wonder if they realize what they have done voting for him? Nah they really are that dumb.
Aug 29, 2013 5:06AM

Me think at peoples may will have mark of beast on right hand or forehead so as to buy purchase things many of kinds and account go directly to beast tab on dedicate server for we names of separate kinds and peoples of orientation many and be list in file for ease access, and knowing who be with beast for he mission and future plan of many happy and many sorrow to world after 3 and one half years peace so that other last 3 and half years be sorrowful and what be called end days, but we be happy now and enjoy paper receipt for now for surely!!


Aug 29, 2013 1:28AM
Why would anyone use a debit card to access their own money, and let the banks skim 2 or 3 percent of every dollar they spend? Americans are morons!
Aug 29, 2013 8:25AM
Think before you swipe!! LMAO.  Not at this article but at Obummer and this whole ashole of a country!! They gonna "swipe" Syria as early as Thursday night!!!  They done got them ships in place two er three days ago!!!  Well, I didn't think they would "swipe" and I thought they would "think" when China and Russia "wawned" them!!!!  I wondered what they would come up with to save face....and ash!!!  Now, they say Britain won't agree!!!!  I thought they would "think" this time before they "swiped" since Russia and China "wawned" them!!!  They wouldn't let a little country back them down!  I'm glad they aren't sending missles to Syria. If they do, maybe Russia and China won't talk anymore.  Maybe they will make a desert in this country!!!  Shicken sits!!!
Aug 28, 2013 8:53PM
You should pay with a credit card.  People who continually use debit cards are probably just deadbeats who don't qualify for credit or just financial illiterates. 
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