The Dirty Secret of Debit Card Security
We've all heard it before, if you've got credit card troubles, get a debit card to control your spending. The idea here is that you can't spend what you don't have, and while that is a very sound idea in theory, those making the move from a credit card to a debit card should be aware that there are some key differences between the two. One of these is in the area of security. When you make a purchase using your debit card, the money is withdrawn from your account immediately. There is no grace period as there is with a credit card, and it can therefore be a lot more difficult if not impossible to successfully dispute unauthorised transactions.
Take, for example, the story of Brad Lipman who shouted his family for dinner but had no idea it would end up costing him $1,800. After requesting the bill, Brad handed the waiter his debit card to cover the food and drink they had purchased. Someone then swiped his card through a portable "skimmer" - an electronic device which can steal and record the details from a card without the owner knowing. In the weeks that followed, unbeknownst to Brad the thief stole all the money from Lipman's cheque account and then started to access his overdraft.
Unlike credit cards, which offer consumers some level of protection in the form of dispute resolution, debit cards take money straight out of your account and are therefore a lot more vulnerable to attacks. If you notice an unauthorized charge on your debit card, it may already be too late as the money is probably already gone.
While debit cards may be a great tool for helping people control their spending, users should be aware of their pitfalls. It is somewhat ironic that the very thing which makes debit cards appealing to some people is also the thing that makes them less secure. Since spending on a debit card results in immediate withdrawal of funds, there is far less time for an appeals process.
If you do use a debit card, there are steps you can take to help minimise your exposure to the risk of theft:
- Never give out your card details or allow a waiter or anyone else to take the card out of your sight.
- Keep a close eye on your account transactions.
- If you notice any suspect transactions, immediately contact your debit card provider to begin an investigation. The sooner you raise awareness of a potential theft the greater the chance that something can be done about it.
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