By now, everyone has seen new promotions by banking institutions offering anything from 3% cash back on debit card purchases to Bank of America’s “Keep the Change” program. These are pretty attractive offers…and I believe they are damn near criminal. On the one hand, banks are advertising credit cards with “fraud proof” guarantees (which are really being offered by the credit card processor like Visa) that often show a customer who has been the victim of fraud and the bank’s nice customer service agent putting the money back in the account within a few business days. On the other hand you have them offering financially attractive offers on debit card purchases...which offer no liability protections.
In my mind, by sending out these two messages at the same time makes this fraudulent advertising. I can understand the bank wanting their customers to use their debit card because they collect the majority of processing fees. They really want it to become a habit for consumers to reach for their debit card instead of using their credit card (which send the majority of processing fees to the credit card company). But using this kind of deception that puts so many people at risk is inexcusable.
I personally never use my debit card. If I need cash I go to a bank branch instead of using an ATM. I do this because it is way too easy to be taken advantage of.
One of the most common scams against debit cards is fairly simple from a technology standpoint and only costs a few hundred dollars. Any idiot can get instructions and purchase the materials needed from the internet. It usually involves a rigged card reader to record all the tracks of data from your card when swiped and a hidden camera to record the PIN number you type in. Once you have used your debit card, they can now clone it, check your account balance at the bank with your PIN, and make purchases that leave you responsible for the charges.
To make matters worse, there isn’t anyone to investigate the fraud. The banks don’t care, they didn’t loose any money. Local law enforcement, if notified (which is often not the case), would have a hard time linking cases together and lack the resources to properly investigate them. Since these scams are normally done by a single crook, they often are too small and unrelated for the Feds to take any notice.
If you were to take all the debit card fraud and make a single entity liable for it, the problem would be fixed. Since the fraud is spread out on individual consumers, little to nothing is done about it. That’s why I refuse to use my debit card and despise the banks who deceptively try to get you to use yours.