A Cautionary Tale About Debit Cards and the Awful People Who Steal Them

Recently, I had my debit card stolen.  Well, not physically stolen, as I still had the actual card in my wallet, but its numbers were stolen.  A person in Oregon made (or bought) a fake card with my information and then used it to purchase prescription drugs in Canada.  Someone must have compromised a local card machine with one of those card scanner things that grab all of your information when you swipe your card to pay for something.

Needless to say, I wasn't happy about this.  I was even less happy when it happened again the next day with my husband's debit card.

 

Both cards were tied to a PayPal account that we have.  I reported each theft as soon as I discovered it, which was almost immediately since I get an email notification of every purchase made.

 

PayPal was great to deal with.  I called and was able to speak to a human being, and the money was returned to my account within a few days.  Waiting a few days for the cash to be returned wasn't a huge problem since I still had the debit card to my checking account.

Two weeks later, though, it happened again - this time to the debit card linked to our bank account.  The thief spent over $200 at a Food Lion in Delaware, enough to overdraw the account and cause serious financial turmoil if we didn't get some money in that account fast.

 

At first, I felt compassion toward the thief.  He didn't buy drugs from a French Canadian pharmacy; he used the card at Food Lion.  I imagined him similar to us, living paycheck to paycheck, and struggling to make do with income that's never enough.  The thief probably doesn't want to steal but is forced to in order to feed his family. 

My oldest son straightened me out.  "He probably bought liquor, Mom.  Something he can re-sell for cash.  That's what those people do." 

So much for compassion.  If I could, I would've hunted him down and given him a stern lecture about how despicable it is to steal.  Then I would have kicked him in the groin - HARD - so he remembers.

I called my bank who told me that they wouldn't be able to return the money for ten days to two weeks.  Apparently debit cards work differently from credit cards.  With a credit card, the card is killed and you're not responsible for any charges.  A stolen credit card also doesn't tie up funds in your bank account while the fraud is being investigated.  With a debit card, you could be held responsible for a portion of the charges if you don't discover them right away, plus you're without the money that was stolen.

 

Fortunately, I discovered the fraud right away.  I'm always so broke that I check my account every day to make sure nothing surprising came out that would topple our financial house of cards.  This loss of over $200 definitely qualified as a surprise!

Thanks to this terrible person who stole from us, we had to borrow the funds to cover the amount that our bank account was in the hole so that nothing would bounce, and then not spend any money until pay day.  No food, no gas, nothing.

Apparently, this type of theft is becoming increasingly more common, even in tiny towns such as mine.  Our technology is so outdated that nearly anyone with criminal intent can steal our credit and debit card information by compromising the card swipe machines.  Until technology improves, we are all vulnerable.

In our situation, the thefts likely happened a local grocery store.  We're now using checks when we food shop and cash at gas stations to prevent this from happening again.  Any place with unattended credit card machines, such as food stores or gas pumps, is a prime target for thieves to insert their number skimming devices.  Since ATM machines are also frequently compromised, it's best to get cash directly from the teller at the bank.

One good thing in all of this is that the less we rely on the plastic in our wallets, the more money our local merchants get to keep.  They won't have to pay the surcharges imposed on each transaction, whether debit or credit, by the credit card companies.  Each time we swipe our cards, that merchant pays approximately 3% of the purchase amount to the credit card companies - a significant amount, especially for small businesses.  By paying cash or using a check, the merchant won't have that expense, which will help to boost our local economy even more.

For more information about unauthorized use of credit or debit cards: 

http://www.nolo.com/legal-encyclopedia/unauthorized-credit-debit-card-charges-29654.html

http://www.usa.gov/topics/money/banking/atm-debit.shtml