Navigating the World of Debit Card Fraud

It seems like everyday we are hearing of another security breach involving the capture of debit and credit card information. Last week it was reported that Michael’s Stores uncovered another debit card scamming operation affecting dozens of stores. Last month Sony Corporation revealed a hacker had breached its security system and may have compromised hundreds of thousands of customer’s sensitive financial information.

Unfortunately, these electronic bank robbers are only going to increase in number as consumers increasingly shift their purchases of goods and services from checks and cash to plastic and online portals. In fact, debit card usage now surpasses checks and credit cards as the payment method of choice for Oregon consumers.

This past weekend Beaverton, Ore., Police Department reported 35 complaints of debit card fraud in just a 3 day period. That compares to a total of 8 complaints in the entire month of May. Are they your credit union members?

Protecting your member’s financial information is not only important for the member and their family; it also impacts the bottom line of the credit union. Fraud can create years of headaches for your member if their financial profile is damaged due to fraud. The credit union has to pay to restore the losses the member has suffered from their account plus assume most of the cost of issuing and accounting for replacement cards and perhaps opening and closing accounts. What can your credit union due to help mitigate the risk for both the credit union and your members?

If you have not already done so, consider offering fraud prevention tools and tips on your web page and feature it prominently for members to access. Many credit unions have done this and the information provided is inexpensive risk management for both the credit union and your members.

You may wish to consider a marketing campaign at branch offices to alert members to the issue of fraud protection and help provide useful tips to protect themselves. Be sure to impress upon your members the importance of reporting any compromised card activity to the credit union immediately. A number of helpful tips for members include:

  • Always keep your card in a secure place. Never leave your wallet or purse unattended.
  • When purchasing with a card, always make sure you get it back promptly and look to make sure it is the same card.
  • Do not let others use your card.
  • Always destroy or shred statements before discarding them.
  • Check your statements regularly online and check for any fraudulent activity.
  • Use only your own personal computer when shopping online-never a shared or public computer.
  • Never give your PIN number to anyone.
  • Keep a record of all your credit and debit card numbers and issuer’s phone numbers in a secure place separate from the cards themselves.

These are just a few helpful hints that might prevent your member, and thus your credit union, from becoming a victim of fraudulent activity. A pro-active approach to risk management in this area is now more important than ever before.

Posted in Advocacy News.