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You might think that credit cards are the payment method most commonly targeted by financial scammers, but that’s not the case. In fact, according to a Federal Reserve survey of financial institutions, debit cards are the most popular among fraudsters, and the number of cases involving debit cards continues to increase(1). The reasons why this might make you more vulnerable to financial loss may also surprise you.
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When you think of debit card fraud, you probably picture people having their debit cards stolen or their card numbers and PINs stolen. But other, more sophisticated debit card frauds are also on the rise. And, as with other scams, having information about how it works can mean the difference between keeping your finances intact and becoming the next scam victim.
As the Detroit Free Press recently reported, new debit card scams are emerging and gaining momentum(2). One of the strangest things is that bank customers are being warned that there is something wrong with their accounts, a common theme in financial scams.
Next, the victim is told to destroy their debit card but leave the chip on the front of the card intact for security purposes. The scammers will then send a “bank representative” to pick up the destroyed cards with intact chips and use social engineering to obtain the PINs needed to use the cards, thereby stealing the chips. With the chip and PIN, they can steal funds from the victim’s bank account.
Of course, debit card fraud isn’t the only thing consumers have to worry about. The Fed’s survey also found that check fraud is also on the rise, with an increase of 10% in 2024 compared with the previous year.
Independent Community Bankers of America has been working with the U.S. Postal Inspection Service to educate customers about check fraud through promotional materials distributed at various bank locations.
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Financial fraud is a widespread problem, but as a consumer, you may be at risk for greater losses if your debit card or checking account is targeted.
Under the Fair Credit Billing Act, consumers may lose no more than $50 for a fraudulent credit card transaction reported within 60 days(3). However, most credit cards offer comprehensive protection, which means you likely won’t lose a dime if your card is stolen or used by a criminal.
Debit cards generally don’t offer the same protection. When your debit card is stolen or used by a criminal, money is immediately debited from your account.
If you report the fraud within two business days, your damages are capped at $50. If you report the fraud after two days and within 60 days, your losses are limited to $500 – not a small sum. Even worse, if you report the fraud after 60 days, you could lose the entire amount stolen(4).
For checks, the time frame will be different. The law gives consumers a year to report check fraud, but there is some leeway. For example, many banks require notification within 30 days, while others prefer notification within 14 days of the bank statement being issued(5).
As a consumer, it’s important to take steps to protect yourself from debit card and check fraud. This includes staying up to date on the latest scams, including the ones mentioned above.
But that doesn’t mean criminals won’t try to steal your money in other ways. Maybe they could steal a replacement debit card from you through the mail, or steal a check you wrote, change the payee and cash it.
One protection option you might consider is to install a mailbox lock, where the incoming mail slot remains accessible while the storage portion remains locked to anyone without the key. This prevents criminals from hacking into your mail while allowing the postman to deliver it.
You can also install a security camera outside your home that covers your mailbox area. However, this may only provide limited benefits. If a criminal wants to steal your mail, they’re likely to be wearing enough gear to conceal their identity.
For debit cards, other fraud prevention methods include always knowing where your card is, covering your keyboard when entering your PIN, and making sure to shop on legitimate, secure websites while avoiding public WiFi networks when shopping online.
Also, keep an eye out for loose components on merchant debit card readers. This may indicate that the machine has been tampered with and an oil skimmer has been installed.
Other tips include regularly monitoring your bank account to check for fraudulent transactions and never responding to unsolicited phone calls, emails or text messages that appear to be from your bank. If you have questions, call your bank directly or visit a local branch.
Also, never give out your account or PIN over the phone. The same goes for your Social Security number (or other personally sensitive information in general). With this information, criminals can easily steal funds from your account and, in some cases, even steal your identity.
When it comes to checks, fraud prevention methods include writing the check with a permanent marker or sending the check electronically from your bank. With the latter, your bank has a record of the intended payee, so it may be easier to prove that fraud has occurred.
It’s also a good idea to take your check to the post office and mail it directly, rather than leaving it in the mailbox for the postman to pick up. Delivering your check in person is another safe option.
Internet fraud is on the rise, and the FBI reported that Americans were defrauded of $16 billion by online scammers in 2024, a 33% increase from 2023 (6). That same year, the U.S. Federal Trade Commission reported that the amount of money lost from online scams was expected to increase.
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 artificial intelligence monitoring to find unusual transactions and sends alerts within minutes on any suspicious or significant activity. Their US-based fraud experts are available 24/7 to ensure you can find accurate information and resolve your issue quickly.
Aura also offers credit monitoring, identity theft protection, and parental controls, so you can make sure your children don’t fall prey to these fraudsters. Additionally, Aura provides fraud alerts 250 times faster than other similar services.
Sign up now to enjoy this extra layer of security when shopping online.
Ultimately, prevention is the best defense, so be proactive about learning about the latest security measures and how scammers try to circumvent them.
We rely only on vetted sources and reliable third-party reports. For more information, see our Editorial Ethics and Guidelines.
Federal Reserve (1); USA Today/Detroit Free Press (2); Cornell Law School Legal Information Institute (3); Michigan Consumer Protection (4); Time (5); FBI (6)
This article provides information only and should not be considered advice. It is provided without any warranty of any kind.
