Friday, January 24, 2014

Recent Target Revelation and your Debit/Credit Card

Is it just me or has this come as a wake up call for personal privacy and banking protection?

dollar signI remember when the debit card first hit the scene. In California, a certain gas station charged you if you used the debit card, a 20 cent transaction fee. But the banks were pushing the use, because it would reduce the number of humans it would take process your purchases, and some would reward you for not using checks and swiping instead.

It seems we have come full circle! It just might be safer to use checks again.

I shopped at Target during the recent data theft, not once but several times. It is the closest multi-retailer (general merchandise/groceries/pharmacy) to me. I don’t have any idea, if any of my data was stolen. I waited about 3 days:

  • to see what Target would tell us
  • listened to the news about what we should do
  • and then I went to the banks.

So far the only answer that has really been given is monitor your statements. I don’t know about you, but it is not always easy to remember where you spent your money, I mean really… if you manage a house you swipe a lot!!!

We have all been conditioned that the cards are a safe way to transferimages money from your account to the retailers account, debit was immediate, and we have been told that credit gives you protection of a credit card. Well I am here to tell you it does not. I did not do an in-depth study, I did not contact any ‘knowitalls’ in the banking/money industry. I did a little reading, here and here, asked a couple of questions and then put that together with some common sense.

swipeI cancelled the possible compromised card and had the bank issue a new one. We monitor our accounts almost daily. It is so easy these days, but even with a checkbook, I forget that I WROTE a check and that is nearly as rare as hens teeth! After living in South Africa, where banking fraud, skimming credit cards, and phishing scams are frequent we are more vigilant than ever about banking and theft.To prove the point, the DH was looking at the banking info the on Monday, he asked did I buy anything from a place called Tickets Direct in Utah for $300 plus? Nope. He immediately called the bank to report the fraud (and cancelled the card). It took 4 days for it to be resolved, but the money was taken from our account while the charge was pending and eventually reversed. If you were living close to the ‘bank balance’ edge, then a $300 charge could cause problems. For the record, a CREDIT CARD is the only card that has real consumer protections, a DEBIT CARD does NOT!

bankTo protect ourselves, we have opened another checking account. This one is not linked to our main account. It is with the same bank for easy transfer of money from one account to the other. Now we will have an account for shopping in the stores and online (-along with PayPal), and if compromised the thieves won’t get everything, just the limited funds we add to the account. I don’t want to wade through the mess if someone got access to the main account…. mortgage payment, insurance payments, utilities -never mind all the fees the bank will charge for overdrafts and the letter writing. The loss of actual money is not the worst thing that can happen. Your credit will be damaged and your identity could also be stolen or severely compromised. What I don’t understand is why the banks have not encouraged everyone to cancel the card they used at Target or other compromised retailer? It will cost a few cents… but better that than bankrupt customers.

What have you been told? What are you doing to protect yourself?

More later. Beth

6 comments:

wolfiestitchin said...

Well icky little me who works at a major bank, so I never have any problems, Not even the one time when the CC was swiped in France...:)
I use the debit card for food etc purchases only and the CC for all the rest. If online shops uses Paypal, I use that. All Master Card transactions within Sweden require an extra security code.
Like you I keep a close tab on my accounts, online banking is great and as long as the kids have not come of age, I can keep a tab on their debit cards as well.
But even if I work where I work, there has been no warnings issued - they come in the evening press etc. A wee bit strange...

wolfiestitchin said...

Not icky - lucky!!!

Anne Marie - Toronto said...

I've had the bank contact me if there's been debit fraud in the area (somewhere I've used my card). They asked me to come into the bank, cancelled my debit card and re-issued. Now this was because of a bank machine fraud and not something like Target. I'm not sure how that would be handled.

Paule-Marie said...

It's an absolute pain in the behind. We live outside a small rural town. At least once a year, sometimes twice, my credit card is compromised. Just happened yesterday, so waiting for a new credit card. Did anyone see the news piece on TV where they said the cost to the banks and Target and Niemen Marcus was something like 200 million and the cost to the banks to change to some kind of digital protection was 20 million. Can't remember the correct numbers - but the whole point was it was a small fraction of the cost of fraud and that didn't count what affected the consumer.
go figure.

Sara LaHood said...

As someone who lives close to the edge, I'd be in serious trouble if $300 was deducted from my account! I like your idea of a 2nd account. I'm planning on using my credit card rather than my debit and immediately transferring the money from checking to the card.

Becky said...

For once, I'm glad that we don't live near a Target, but that said, we've had our number stolen twice in the last 4-5 years, and what a mess that is!! Our credit card company has been the one to alert us every time, so I stay with them, and rarely use our debit card. The most recent theft was eventually tracked back to a compromised on-line fabric purchase :-O. That's a tough one, because living in a rural area, we do lots of on-line shopping. sigh...