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You might think that credit cards are the payment method most targeted by financial fraudsters, but that’s not true. In fact, debit cards are what fraudsters target the most – and the number of cases involving them continues to rise, according to a Federal Reserve survey of financial institutions (1). And the reasons why this can leave you more vulnerable to financial loss may also surprise you.
When you think of debit card scams, you might imagine having their debit cards physically stolen or having their card numbers and PINs swiped. But there are other debit card scams on the rise that are even more complex. And as with other scams, knowing how they work can mean the difference between keeping your finances intact and becoming the next victim of fraud.
As the Detroit Free Press recently reported, new debit card scams are emerging and gaining momentum (2). One of the most bizarre starts with bank customers being alerted that there is a problem with their account, which is a common theme for financial scams.
Victims are then told to destroy their debit cards but leave the chip on the front of the card intact for security reasons. The fraudsters then steal the tokens by sending a “bank representative” to pick up the destroyed cards with the tokens intact and use social engineering to obtain the PIN numbers needed to use the cards. With the chip and PIN, they can then steal funds from the victim’s bank account.
Of course, debit card fraud isn’t the only thing consumers have to worry about. Check fraud was also on the rise, rising 10 percent in 2024 from the previous year, the Federal Reserve survey also found.
Independent Community Bankers of America partnered with the US Postal Inspection Service to educate customers about document check fraud at various bank locations.
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Financial fraud is a problem in general, although as a consumer you may be at risk of greater losses if your debit card or checking account is targeted.
Under the Fair Credit Billing Act, consumers are limited to $50 in damages for fraudulent credit card transactions that are reported within 60 days (3). However, most credit cards offer full protection, which means that if your card is stolen or used by a criminal, you probably won’t lose a penny.
Debit cards don’t usually offer the same protection. When your debit card is stolen or accessed by a criminal, the money comes out of your account immediately.
If you report fraud within two business days, losses are limited to $50. If you report the fraud after two days and within 60 days, you will be limited to $500 in losses – not an insignificant amount. Worse still, if you report the fraud after 60 days, you can lose the entire amount that was stolen (4).
With checks, time frames vary. The law says consumers have one year to report check fraud, but there is some leeway. For example, many banks require notification within 30 days, while others expect to be alerted within 14 days of sending the statement (5).
As a consumer, it’s important to take steps to protect yourself against debit card and check fraud. This includes knowing the latest scams, including the one mentioned above.
But that doesn’t mean a criminal won’t try to steal your money some other way. Maybe they could steal a replacement debit card from you in the mail or steal checks you’ve written, changing the payee and cashing them.
One option you could look into for protection is to install a mailbox lock where the incoming mail slot remains accessible while the storage side remains locked to anyone who doesn’t have the key. This could prevent a criminal from getting into your mail while still allowing a postal operator to deliver it.
You can also install a security camera outside your home that covers the mailbox area. However, this may provide only limited benefits. If a criminal is going to steal your mail, chances are they’ll be wearing enough gear to mask their identity.
For debit cards, other fraud prevention methods include always knowing where your card is, covering the keypad when entering your PIN, and when buying things online, making sure you’re shopping on a legitimate and secure site, avoiding public WiFi networks.
Additionally, look for loose components on debit card readers from merchants. This could be an indication that a machine has been tampered with and a skimmer installed.
Other tips include regularly monitoring your bank account for fraudulent transactions and never answering an unsolicited call, email or message that appears to be from your bank. If you have a problem, call your bank directly or visit a local branch.
Also, never provide your account or PIN over the phone. The same goes for your Social Security number (or other sensitive personal information, as a general rule). Having this information could make it easier for a criminal to steal money from your account and, in some cases, steal your identity.
When it comes to checks, fraud prevention methods include writing checks with permanent markers or sending them electronically from your bank. With the latter, there is a record with your bank of the intended beneficiary, so it may be easier to prove that fraud has occurred.
It’s also a good idea to bring checks to a post office and mail them directly instead of leaving them in the mailbox to be picked up by a postal carrier. Delivering checks in person is another safe option.
Online scams are on the rise, with the FBI reporting that in 2024, Americans were defrauded out of $16 billion by online fraudsters, a 33% increase from 2023 (6). That same year, the FTC reported that the dollar amount for losses from online scams was projected to rise.
To protect yourself and your loved ones from these online scammers, consider using a scam alert service like Aura.
Aura’s online scam tracker uses AI monitoring to look for unusual transactions, sending alerts for any suspicious or significant activity within minutes. Their US fraud experts are available 24/7 to ensure you can find accurate information and resolve the situation quickly.
Aura also offers credit monitoring, identity theft protection, and parental controls so you can make sure your kids don’t fall prey to these fraudsters. In addition, Aura provides fraud alerts up to 250 times faster than other services of this type.
Sign up today to enjoy this extra level of security when shopping online.
Ultimately, prevention is your best defense, so be proactive in learning about the latest security measures and how scammers try to get around them.
We only rely on verified sources and credible third-party reports. For details, see our ethics and editorial guidelines.
Federal Reserve (1); USA Today/Detroit Free Press (2); Legal Information Institute at Cornell Law School (3); Michigan Consumer Protection (4); Time (5); FBI (6)
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
