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Debit card fraud on the rise

Debit card fraud is on the rise throughout the country. Thieves are using sophisticated tools, such as card skimmers, to steal consumer’s credit and debit card information and spend their ill-gotten access to rack up hundreds and thousands of dollars worth of fraudulent charges.

In the past week United Cumberland Bank (Formerly Bank of McCreary County) has issued new chip cards to all customers. A spokesperson for Forcht Bank stated the bank has had the cards in place for the past year in an effort to curtail illegal activity.

UCB’s issuing of the new cards comes on the heels of a recent spate of debit card fraud both locally and in Tennessee.

“We haven’t been hacked,” Gordon Kidd, CEO at United Cumberland Bank said.

“We started seeing an increase in debit card fraud activity in the late spring in Tennessee,” Kidd said. “Apparently, there was possibly a card skimmer at a gas pump or ATM.”

Kidd said the disturbing trend may have struck at home as well.

“In the last week we have noticed incidences of debit card fraud in McCreary County,” he said. “There may be a skimmer present in the county somewhere.”

“From what I understand all banks in our area are seeing an increase in fraud activity,” he added. “This isn’t isolated to our bank.”

Kidd said once the problem was identified in the spring, the bank started taking steps to replace the old magnetic strip debit cards, with the new cards equipped with a micro chip to help keep data secure.

“We immediately started to replace our debit cards with new ‘chip cards’ to protect our customers.”

Due to the increasing demand for the chip cards, which took some time, last week UCB completed a mass re-issue and all customers should have the new cards in hand.

To further combat fraud, many banks have blocked out of state or non-local transactions for some customers.

“We have tried not to be that restrictive,” he said. “We have blocked some states where a high amount of questionable activity has been seen, but our customers can call us to lift that block if they are planning on traveling to that state, for instance.”

Kidd offered some simple precautions customers can take to protect themselves from debit card fraud.

When using an ATM or other point of sale device where you have to swipe your card Kidd recommends tugging on the slot to see if there is a skimmer attached. Additionally, particularly at a gas pump, examine the machine to see if it may have been tampered with or opened.

And, as always, check your debit card transactions against your monthly bank statements to ensure there has been no unauthorized activity.

Kidd urged customers who notice a suspicious or incorrect transaction on your account to immediately notify the bank. If the transaction is spotted in time, typically within the first 60 days, the bank will take action to investigate the claim and refund the stolen money to the account.

Chip, or EMV cards are the latest innovation by credit card companies to protect consumers from fraud.

Instead of the simple swipe, which most users are familiar with, new terminals are being installed at most retailers that also have a smaller slot on the front where you simply insert your card. This is all part of the country’s shift toward more secure, but far from perfect, chip-enabled cards.

Consumers will use a smartcard embedded with a microchip and provide their PIN (or a signature) to complete a transaction. The chips make reproducing a card difficult for criminals. Even if the credit card information is gathered, without the chip, the card is useless for in-person transactions.

Last year, major credit card companies in the United States began a push to implement the new chip cards and shifted liability to the retailers to install the new readers or else be responsible for fraud.

That means if a merchant is using the old swipe-and-sign system they are responsible for the cost of fraudulent charges if the customer has a chip card. If the merchant has the proper chip-and-PIN system but the bank hasn’t issued a new chip-and-PIN card to the customer, then the bank is liable.

Gas station retailers have a little more time to upgrade, October 2017, due to the larger amount of infrastructure involved.

Customers should also be aware that the new cards have limitations in their security. For example, it doesn’t necessarily prevent an ID thief from using stolen card numbers for online or phone purchases. There is no such thing as a card that is 100% safe from clever criminals.

Protect Yourself

Skimming is a common way for cyber-criminals to steal your money. When you use your debit or credit card at a gas station pump, withdraw cash from an ATM, or use your card in a ticket kiosk or vending machine, you are at risk. Criminals install portable card readers called skimmers onto these types of terminals so that they can collect your data off your card’s magnetic stripe. Consumers are advised to be alert and aware of skimming tactics and to arm themselves with information to be better protected from skimming.

1. Check for Tampering

At any ATM, check for signs of tampering or remote installations that don’t appear part of the machine (such as a small camera or wires that appear to be out of place). Look on the card reader and near the speakers. The keyboard should not have a film or cover on it or be more than one piece. There shouldn’t be any loose parts if you give a pull on something that protrudes, like the card reader. Even if these are in check, if something just doesn’t feel right about an ATM, don’t use it.

2. Wiggle and Cover

A good practice to get into is to wiggle your card a bit as you swipe it or push it into the reader. Skimmers reportedly have a harder time collecting the data because of the wiggle motion. You can also give a wiggle to the card reader mechanism, keypad and other parts to make sure nothing is loose. Additionally, always use a cover – your hand, your phone, a piece of paper – as you type in your PIN.

3. Use Indoor ATMs

High traffic areas with ATMs inside banks and grocery stores are typically safer than outdoor terminals. Also, the risks for skimming are higher on the weekends because criminals will install the skimmers on Saturdays or Sundays and then remove them before banks open on Monday. Be aware that today’s criminals are sophisticated and no ATM is completely safe.

4. Always Report It

Reporting suspicious activity or theft to your card issuer or bank as soon as possible is paramount to not being held liable to the amount you might lose if you fall victim to an ATM skimming attack. Most financial institutions have a zero liability policy that protect their customers, but there is still a process that needs to be followed. The sooner you report fraudulent activity the better!

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