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    • Warning: Dangerous new ATM skimmers could empty your bank account-Clark (Howard) forewarns,” fewer consumer protections with debit cards.” Plus, Clark video: Why Clark doesn’t like debit cards, and 9 places to never use a debit card.

    Warning: Dangerous new ATM skimmers could empty your bank account-Clark (Howard) forewarns,” fewer consumer protections with debit cards.” Plus, Clark video: Why Clark doesn’t like debit cards, and 9 places to never use a debit card.

    If you wish to continue using a debit card in the future, be sure you tie it into a separate account that’s only used for debit transactions so only that money is at risk. You want your account that has the money you pay your mortgage, your car payment, your student loans, etc. cordoned off so it can’t be compromised.

    Credit: clark.com

    An alarming new report found there was a 70% increase in the number of debit cards compromised at ATMs and at card readers used by merchants in 2016, according to FICO Card Alert Service.

    For years, Clark has warned about thieves using skimmers at ATMs to steal your money.

    Skimmers are getting more sophisticated

    Police departments nationwide are having a difficult time keeping up with the bad guys because they’re constantly using new technology to improve skimming devices.

    One of the latest weapons in their arsenal is the deep-insert skimmer, a tiny device that goes inside ATM card slots.

    According to TransUnion, they’re different from other types of skimmers because they’re placed in a way that they’re usually not visible to the person using the ATM.

    KrebsOnSecurity said it acquired this how-to video to show the devices in action. Click here for more YouTube.

    What exactly is a skimmer?

    If you’re not familiar, a skimmer records data stored on the magnetic stripe of payment cards, which is transmitted to thieves to make duplicate cards.

    Thieves may also use tiny cameras to capture your PIN when you enter it on the keypad.

    “As the last few years have proven, skimming technology and knowhow have improved and are more accessible to the general population, so we will continue to see increases in compromises and the speed at which they occur,” said TJ Horan, vice president of fraud solutions at FICO.

    How to protect yourself

    While it’s difficult to guarantee that you never fall victim to an ATM or other card skimming scam, there are ways to minimize your risks, as well as minimize the damage if does happen to you.

    First, it’s important to know that you have fewer consumer protections with debit cards. For example, let’s say you notice fraudulent activity on your credit card. You have 60 days to report it and dispute the charge with your credit card company. But if you used a debit card, you have only two days to report it!

    On top of that, hotels, gas stations, rental car companies and other companies will put a hold on your checking account if you use a debit card. If you have any checks floating around that someone tries to cash — or other payments scheduled to go through from the same account — that could cause your account to be overdrawn and result in big fees. Plus, the company that runs your debit card may even do a hard inquiry on your credit without you knowing, which will lower your credit score!

    So with all that in mind, here are some ways to protect yourself:

    Grab the plastic slot on an ATM where you insert your card and shake it to make sure that it doesn’t come loose. If it’s moving up and down in your hand, there may be a skimmer attached.
    Use your free hand to cover your other hand as you punch in your secret code: Remember, you may be on a crook’s candid camera or someone may be viewing you remotely with binoculars.
    • Consider setting daily ATM limit: If you don’t carry huge money in your checking account, you might consider instituting a daily limit on ATM withdrawals. Check with your bank or credit union for more details.
    Only use bank-affiliated ATMs: According to FICO, 60% of all skimming incidents occurred at non-bank ATMs — so try to avoid independent ATMs that aren’t associated with a particular bank — like those at gas stations and other random locations.
    • Never use a debit card at a gas station pump: If you have to use a debit card, go inside to pay.
    • Avoid using a debit card at other places that are popular for scammers: grocery stores, online shopping.
    • If you can ditch your debit card for a credit card, do it: Credit cards come with a lot more protections than debit cards.
    • Check your bank statements daily: If your account is compromised, you may be able to catch it quickly and avoid more damage if you keep up with your accounts regularly.

    Even though Clark doesn’t like debit cards, he still has one in his wallet! Why? To pull money out of an ATM. He says it’s the only time he ever uses it.

    You may also be able to request an ATM-only card from your bank to use for withdrawals.

    Credit: clark.com

    Debit cards are a popular alternative to credit cards, because they only allow you to spend what you have in your checking account. In fact, 31% of holiday shoppers plan to use debit to pay for their purchases this season, according to a new BankRate.com survey. But debit cards are full of hidden dangers for your wallet!

    Long called ‘piece of trash fake Visas and fake MasterCards’ by Clark, debit cards are overwhelmingly inferior to credit cards for several reasons.

    If your credit card is compromised, the harm to you is relatively small. You contact the issuer to report false charges and you may have to do some paperwork, but no money leaves your hands. With debit card fraud, however, there is money that leaves your hands. And you have to fight to get your own money back. Unfortunately, it’s now taking longer and longer to get that money back.

     Here are more places to never used a debit card.

    Here’s why you might want to kick that debit card out of your life

    First, hotels, gas stations, and rental car companies will put a hold on your checking account if you use a debit card. If you have other checks floating around that someone tries to cash, that could throw you over into insufficient funds land and result in heavy fees. Plus, the company that runs your debit card may even do a hard inquiry on your credit without you knowing, which will lower your credit score!

    Second, you have fewer consumer protections with debit cards. For example, let’s say you notice fraudulent activity on your credit card. You have 60 days to report it and dispute the charge with your credit card company. But if you used a debit card, you have only 2 days to report it!

    A while back, Clark published an article that listed 4 places you should never use a debit card. It was such a popular topic, we wanted to follow up with more places for your consideration.

    9 places to never use a debit card

    1. Pay at the pump

    Skimmers aren’t the only danger to your wallet. The gas station will put a big hold on your account, typically for 4 days, that could cause your checks to bounce. If you must pay with debit at gas station, go inside and pay at the cashier.

    2. When you’re buying online

    Credit card is a much better option. If you don’t get your merchandise, you can do a chargeback during a 60-day window.

    3. At the supermarket

    A couple of years ago, Save Mart supermarkets were hit by criminal rings that put skimmers on the credit/debit card readers at self-check lanes in 20 Save Mart and Lucky branded locations throughout California. Very often, this particular kind of scam will be perpetrated by a crook dressed in the counterfeit uniform of the technology company that does regular routine maintenance on credit/debit card readers at a business!

    4. At the car rental counter

    Pamela Yip of The Dallas Morning News found that it’s standard practice (and completely legal) in the industry for car rental companies to do a hard inquiry on your credit report, often without your knowledge or consent. They’re trying to protect themselves against auto thieves that love to use debit cards as a low-risk method to get rentals that they can steal. But that inquiry can drastically lower your credit score in the process. The simple solution is to use a real credit card instead.

    Read more: How to turn off the debit function of your debit card

    5. When booking advanced travel

    If you have concerns about the solvency of a company you’re buying future travel from, you’re better off using a credit card. This holds true particularly during an economic downturn when leisure travel businesses like cruises and some airlines can go bust. Paying with credit card ensures you can do a chargeback if you don’t get the travel you paid for.

    While we’re at it, have you considered trip insurance if you’re taking a cruise, a tour, or traveling on a trip that requires pre-payment of thousands of dollars?

    6. When buying furniture and major appliances

    If you are ordering furniture or appliances and waiting on delivery, pay only by credit card. You reduce your risk if the store goes bust by doing that, which we saw a lot of during the housing slump when furniture and appliance retailers really took it on the chin. If you do not have your delivery within 50 days, put the credit card charge in dispute. You lose all right to any dispute after the 60th day.

    7. When setting up automatic drafts

    Auto drafts are a favorite way of utility companies, cable companies, health clubs, burglar alarm companies, and even mortgage lenders to get their money from you each month. But that business may continue to make monthly automated clearing house (ACH) debits from your account once your contract with them ends. That is illegal and you can get it to stop by citing what’s called ‘Regulation E’ and using Clark’s sample letter to stop automatic payments.

    8. Independent ATMs

    You run the risk of skimmers. While skimmers can be found on bank ATMs, they’re less likely because there are often security cameras in place. 

    9. At a restaurant

    Because there is such high turnover at restaurants, you don’t want a dishonest employee to get hold of your digits.

    The only safe way to handle a debit card is…

    If you wish to continue using a debit card in the future, be sure you tie it into a separate account that’s only used for debit transactions so only that money is at risk. You want your account that has the money you pay your mortgage, your car payment, your student loans, etc. cordoned off so it can’t be compromised.

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