Reports of debit cards, electronic funds, and ACH frauds were up by 32% in 2020 in comparison to 2019, according to reports created by the Federal Trade Commission (FTC). Most customers end up finding unauthorized charges on their account and it can be a hassle for banks to resolve debit card fraud. Fortunately for banks, financial institutions, and customers is that continuous monitoring of accounts can help in protecting your money.
Pros and Cons of Using Debit Card
No doubt that Debit Cards allow for easy cashless and contactless transactions. Using debit cards has its own advantages and disadvantages.
Pros of Using Debit Card:
Cons of Using Debit Card
As the name suggests, debit card fraud is when fraud happens when a fraudster somehow gains access to a person’s debit card. Here are some common types of debit card fraud:
The financial problems created by debit cards can be far harsher compared to credit card fraud. That’s why credit cards are considered a safer option while making a purchase. There are two primary federal laws “Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) which are built for consumer liability in the event of a debit or credit card fraud.
In the FCBA, credit card users are only responsible for up to $50 in terms of unauthorized transactions. While the liability of debit card fraud depends on the time taken to report it.
In ETFA regulation, if a person reports their debit card as stolen before any transaction happens. Then the customer isn’t responsible for any unauthorized transaction that happens. If you don’t report your stolen debit card, then the losses you’ll have to bear will depend on when you make the report:
It is vital for customers to keep a tab on the activities that happen in their accounts. Constant monitoring allows both customers and businesses to keep an eye out for red flags.
When it comes to protecting yourself from debit card fraud, it is vital to stay on the defense. Constant transaction monitoring will help the customers and businesses to keep a track of all the out-of-place transactions. Here are the best practices for debit card fraud prevention:
1. Review Bank Statements/Authenticate Bank Statements
Online bank accounts often provide customers with a transaction log where customers can keep track of the purchase. Banks and financial institutions also need to authenticate the bank statements that customers present to the bank to ensure that they aren’t just trying to take advantage of the bank’s policies. DIRO bank account verification software assists in authenticating bank statements instantly.
2. Keep a Track of Your Statement
All the physical statements that you decide to keep safe should be kept in a safe place so that no one can access the documents.
3. Keep Track of Your Debit Cards
As millions of transactions happen every day around the world virtually, not all customers use their cards regularly. It is easy to lose your debit card on the rare occasions that you actually use them. Keep track of your cards so they don’t fall in the wrong hands.
4. Be Wary About Where You Store Your Data
Avoid storing your debit card number or your PIN on your smartphone. Phishing emails, data hacks, and plain old theft can lead to criminals getting your information.
5. Protect Your Debit Card During Online Shopping
Make sure you don’t shop from online stores that seem fishy. There are some common precautions to take before shopping online: