Hassles of Debit Card Fraud

Written by Maksim. Posted in Economic, Financial Planning

I am always very careful with the websites I visit, or merchants with whom I shop.  I never click on links in emails from people  do not know. This is why I was shocked when I was trying to make a purchase for about a few dollars on a business debit card I use for certain expenses which was declined.

Quickly logged in online and to my surprise, there were transactions from merchants I have never heard of, for amounts I never made purchases for.  They ranged from $.75 to $700+.  A quick call to the bank and got confirmation that my card was blocked due to multiple transactions from Spain. I have become a victim of debit card fraud.

Unfortunately not even the bank knows who got my debit card info, however any card swipe, the merchant has access to all the info they need to make the charge, the card number, card holder name,  the security code, expiration date, and even the pin if you used the cad as debit.

Cards get stolen, information gets lost.  Then…. it gets sold to the highest bidder overseas.

Fortunately my bank is not giving me too much trouble,  however it could be a lot worse.  It will likely happen to everyone and this is one great reason to use a credit card over a debit card.

When you make a purchase with a debit card, or someone makes a fraudulent transaction,  money is automatically taken out of your account.  In the case of fraudulent transactions, you will have to write a letter to the bank, and sometimes fill out claim forms.  Then, you have to wait for a provisional credit,  which takes up to 10 business days, while your bank investigates the charges.

There are minimum provisions banks take, for instance when this happened years ago at Bank of America, they sent me the claim forms home and instantly gave me a credit.  When Anastasia had her purse stolen, Capital One had her jump through hoops.  She had to go to a bank branch, which closed quite early, fill out reports, and wait a week or two to get a provisional credit.

Her American Express card was a different story.  One phone call, profuse apologies for the troubles she was having, an instant credit on the account, claim forms in the mail and a new card sent 2 day express.  Most of all…. since it was a credit card, you are never short on cash.  Had someone charged up quite a bit more, or the bank did not block it earlier, the situation would have been bad.  The daily transaction limit on most debit cards is over $5,000, or $10,000 in the case of my bank.  Fortunately, they blocked the card when the large transactions came from Spain.

Here are some tips that are easily implemented that will prevent you many headaches when fraud happens to you:

1. Use a credit card for all your purchases.  Pay off your credit card monthly to avoid interest fees.  Bonus perks, airline miles, cashback, etc.

2. If you cannot use a credit card, use only one debit card, tied to one bank.  Keep only a month’s worth of expenses on it, and the rest of your money in a different account or even at a different bank.

3. Stay up to date and check transactions regularly, every few days or once a week.

4. Lower your maximum daily limit on transactions and block foreign transactions.  If you have a large purchase coming up, or traveling overseas, call ahead of time to let the bank know, so they can unblock the card.  This way you will not be out of money.  Better yet… use a credit card over seas as long as they do not charge foreign transaction fees.  (most do)

5. Don’t click any links, or open attachments from emails that look even 1% suspicious, especially if they are from a bank. Many hackers send out mass emails and wait for someone to think it is official. You then go to their website and just give them your bank login information.  If you have electronic statements, use a new, private email only for this.  Make sure it is from a reputable company with high spam blocking.  I recommend Gmail.

5.5.  Use an electronic money service such as PayPal for purchases, especially purchases over the internet.

Stay vigilant






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Comments (2)

  • Maksim


    Just a quick update, sent in a letter as per bank’s request to issue credit. Awaiting response. The bank in this case is TradePMR Bank, which is through Bancorp Bank out of Philadelphia, PA. They have been very good with everything so far and quite easy to deal with. Good rates too on savings.


  • Maksim


    TradePMR bank received the letter and already issued the provisional credit! Alright.


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