ATM/debit card risks

I work for a bank and while I have heard this scanning technology exists, it is pretty rare and sophisticated. If you are really concerned about it, there are metal wallets you can buy that will block these scanners from picking up your card info. PIN or signature is not always needed for a purchase. Many point-of-sale merchants will process credit or debit cards up to $50 without either. It's done for your convenience. Online merchants obviously have a means of processing any dollar amount without a PIN or signature. Honestly, the easiest way to steal your card information is to obtain it from merchants whose security systems are weak and can be easily breached. This can happen even if you have never used your card online. Card numbers are stolen by the thousands, not usually one at a time. The banks will not tell you which merchants have problematic security. These are their clients, after all, and they have a lot more money than you do. The best thing you can do to protect yourself (especially while traveling) is to make sure you have at least 2 debit cards from different banks. I use a brick-and-mortar bank (obviously) and an online bank. Make sure you know how to transfer money from one bank to another. That way, if one card gets zapped you will have a backup. One more bit of advice. When traveling in Europe, I generally withdraw money from the ATM and pay for most things in cash. You want to avoid situations where you hand your card to another person who walks away to process it in the back of the restaurant, store, etc.

I agree with the response above, but I think it is worth noting that you shouldn't ever use your ATM/debit card for any purchase at home or abroad where it is out of your sight and never for online purchases. The only problem I've had using an ATM card abroad was when I completed a transaction at an ATM machine, but it didn't give me any money. I had to use another bank's machine (it was a weekend) to get cash. When I went online later to check on my transactions I noticed that I had been charged for two withdrawals. I sent a note to my credit union and pointed out that there was no way to get two maximum withdrawals within 10 minutes of each other and they deleted the erroneous transaction.

Brad is right. I'll add, too, that an ATM card can ONLY be used in an ATM (should it fall into wrong hands, they will need your PIN number and won't be able to use it for swipe only(without pin) at merchants as Brad mentioned is sometimes possible with a debit card). So, ATM-only cards provide a bit more security, but less flexibility. Biggest risk for ATM cards (and also applies to debit cards) is skimmer technology and cameras....bad guys put a little skimmer reader on the card entry slot to read the magnetic strip and then a tiny little camera to pick up your entering your pin. So, use only ATMs at a bank location (still possible, but less likely to have skimmers) and then hold a brochure or your hand up over the key pad as you use the ATM to keep a potential camera from recording your key strokes. You will get a bunch of replies that say this rarely happens.........but you will be surprised HOW often it does happen, and right here in the US (even in Nashville). Brad is right that the largest risk is when the processor's systems are compromised....there was a huge documentary on TV a few years ago about how hackers got into the system of one of the nation's largest credit card processors.....same group that initially hacked TJMax transactions....they got bolder and hit the main processor, which affected lots of places and people. (contined next posting)

My household will not own a debit card.....they do not offer the same protection as credit cards and checking accounts can be cleaned out too quickly. Granted, a large bank (or really any bank) won't want the bad PR and things are usually made good behind the scenes if discovered and reported quickly.....but why risk it....either when you are at home or when traveling. Use ATM only cards for accessing checking, and use credit cards (with their protections) for merchant transactions. Also make sure you have a very secure network when logging in to any on-line banking you do via computer when you travel (or even here at home). I've heard aluminum foil can protect a card, but haven't tried it. Travel/luggage stores sell little protector cases for cards, and some banks offer little sleeves designed to protect cards.....mine is a zillion years old and also protects cards from magnets. Back to your original question, though, if a thief steals your ATM mag info when you walk by, it will be useless to them without your PIN number. With a credit card, they are off to the races....card numbers often sold en mass via organized crime.....if you have the card in your possession, I'd almost be certain VISA/your bank will protect you in those cases.....don't want the bad PR. Take precautions, but don't worry too much........losing a huge amount of cash via a pickpocket is probably the bigger risk. The nice thing about Europe is that waiters most often bring a card swipe device to the table at restaurants, so it is rather rare for your card to leave your eyes anywhere there.

"...My household will not own a debit card.....they do not offer the same protection as credit cards..." Debit cards are protected against fraudulent activity. From the FTC website: "Your liability under federal law for unauthorized use of your ATM or debit card depends on how quickly you report the loss. If you report an ATM or debit card missing before it's used without your permission, the EFTA says the card issuer cannot hold you responsible for any unauthorized transfers. If unauthorized use occurs before you report it, your liability under federal law depends on how quickly you report the loss. For example, if you report the loss within two business days after you realize your card is missing, you will not be responsible for more than $50 for unauthorized use. However, if you don't report the loss within two business days after you discover the loss, you could lose up to $500 because of an unauthorized transfer. You also risk unlimited loss if you fail to report an unauthorized transfer within 60 days after your bank statement containing unauthorized use is mailed to you. That means you could lose all the money in your bank account and the unused portion of your line of credit established for overdrafts. However, for unauthorized transfers involving only your debit card number (not the loss of the card), you are liable only for transfers that occur after 60 days following the mailing of your bank statement containing the unauthorized use and before you report the loss. If unauthorized transfers show up on your bank statement, report them to the card issuer as quickly as possible. Once you've reported the loss of your ATM or debit card, you cannot be held liable for additional unauthorized transfers that occur after that time."

Michael, good clarification....I have not checked the legalise on debit cards in a while. But, even with that extra protection, imagine being in Europe, your ATM transaction is denied, so you do a balance check and holy cow...........where is your money? Account was cleaned out via fraudulent debit card transactions. Panic call to bank...what about all those checks you mailed for monthly bills before you left home? What about automatic monthly payments made out of your checking account, etc.? Less likely to be a problem with an ATM only card. Doing purchase transactions with a credit card gives you the chance to SEE the credit card bill. But, IF (and it depends on how one organizes their money), but if your debit card it connected with your primary checking account and if you have many other transactions coming from that account, might be worth thinking about what could happen (and does happen to many people). Yes, it is worked out, but why have the hassles when on vacation? Some people use a special checking account only for travel....or one of their secondary checking accounts that does not have other auto pays coming from it....that would be a safer way to have a debit card. But, good to know there are protections....was not aware that had been updated over the years. Thank you for setting the record straight.

Skimmers do happen but are pretty rare. It's really not something worth worrying about. I agree in not using a debit card for purchases in Europe. If something happens, you don't want to be working with your bank to clear fraud and replenish your account while on vacation. If you can get an ATM only card, use that while in Europe. It's always good to have a backup card anyway.

I follow a process that isn't particularly elegant but seems to work and keeps us feeling safe when we use an ATM in Europe. Rule #1, we only use an ATM that is physically included in a bank's structure, either the bank's ATM lobby or on an outside window by a bank door. At least these machines are being inspected daily by bank employees. Rule #2, I try to estimate the amount of cash we're likely to need on our trip. I then add 25% to that amount and move the total (125% of estimate) into a separate banking account that provides me a debit card and low transaction fees (1% or less). This way, if rule #1 is violated, the "bad guys" can only get what's left in the travel account, not our main checking account at home. BTW, we always bring our home bank ATM with us as a backup and keep it in our money belt. So far we've never needed to use it.

I used to work at a bank too. The main types of fraud (and likelihood of them happening) are: A server/merchant takes your card out of your sight to process your bill. While there, they copy the information (usually very quickly electronically) and pass it to someone who does fraud for a living - before you know it you have lots of fraudulent transactions processed on your account. The best counter to this form of fraud is be careful about letting your card go out of your sight. A thief rigs an ATM to get your card information. The ones I've seen involve a false front that scans your card as you put it in the ATM. At the same time, a tiny lens films you putting in your pin. The counter is to cover your hand as you put in your pin so no one can see or film you. Many European ATM's have a caution about covering your hand when you put in your pin. Some of the newer cards emit a frequency and there is a concern that someone can get that information and use it. While it's possible, it means someone has to come well within an inch of your card PLUS have the sophisticated machinery to read it. They make wallets that "cloak" the signal from your card. At this point the risk of this type of fraud is so low, it's not really worth worrying about. Worry about the top two. I worry about the top one enough to never use a debit card to make purchases. If the information was stolen, my cash supply could be wiped out. Even though I'll get it back eventually, I'm still out the cash right now. There are other forms of fraud too. Do the best you can, and rely on your bank's fraud protections when you need to.

"my household will not own a debit card" lol so funny, hope everyone in your household is ok with that,, frankly I don't control anyones banking choices ,, including my kids who work, people need to make their own choices,, based on information, not misinformation. I own and use two debit cards,, they have come to Europe with me for last 15-20 years or so now,, they have never been compromised overseas,, but once, one of my cards was compromised at a neighborhood grocers,, about 3 blocks from my home.. my bank covered everything,, no problem at all.

Pat, who said anyone is controlling anyone else's banking choices????
Don't know where that came from. Consensus was reached re: by whole household....NO ONE wants the risk of a debit card, when an ATM card works just as well at ATM machines. We feel credit card is best choice for other electronic purchases, as one gets use of the money, plus the ability to see the bill before paying (w/ debit cards it comes right out of the checking account). No advantage to the debit card. Don't understand your LOL moment.....but everyone get chuckles in different ways. Just trying to be helpful to Kay by sharing one perspective (and the world is full of different perspectives). We each bring different backgrounds and experiences to the helpline.

Thanks, everyone for your help. I have never used my ATM/debit card for a purchase. I only have it so that I can withdraw cash from an ATM machine when in another country. I'm not too concerned about anyone stealing the card as I always use a money belt. My concern is primarily about someone (a skimmer?) Being able to read my card through my clothes and money belt. Scary thought, on more than one level. I've heard about using aluminum foil around your cards for protection but I know the foil would disintegrate in short order. My credit union gave me little plastic card holders for my ATM/debit cards. Does anyone know if this would protect the cards from being read? I definitely agree about using only ATMs connected with a bank whenever possible but I had not thought of covering the machine when I punch in my pin number. I'll do that from now on. Thanks again!

Thanks again, Michael
so, let's see if I got this right: if my ATM/debit card does not have a chip it cannot be read by one of those bad guys with a high-tech device who's lounging around out there just waiting for me to pass by. Correct?

Correct. But there are other dangers like card skimmers implanted inside ATM machines. There's no way to fully protect yourself from fraud no matter what type of card you have.

There are card holders that shield the signal. I'm not sure if the plastic ones you're talking about are the same.