Scam of the day – August 4, 2017 – Debit card fraud increasing

According to statistics of FICO, the company that created the credit scoring system used by banks and others to measure credit worthiness, debit card fraud increased by 26% between 2015 and 2016 and my belief is that the problem is going to get worse before it gets better.   A large part of the problem has been the failure of many companies to switch over to the more secure EMV chip credit and debit cards as required by industry guidelines that do not carry the weight of law.  While the date for retailers to switch to EMV chip credit and debit cards has long passed and the deadline for ATMs using MasterCard debit cards was last October, the date for gas pumps to implement EMV chip credit and debt card technology has been extended until 2020.  This gives identity thieves plenty of opportunities to install cheap and easy to obtain skimmers on ATMs, gas pumps and the card processing equipment of non-complying retailers to steal credit and debit card numbers to be used for fraudulent purposes.

However, the problem is much worse with debit cards.  The holder of a credit card used for fraudulent purposes cannot be assessed more than $50 for such use and most credit card companies charge nothing. However, the potential liability of a person whose debit card has been compromised can reach his or her entire bank account tied to the card if the card owner does not report the crime promptly and even if the card owner does report the theft promptly, the debit card owner’s access to his or her own bank account is frozen while the bank investigates the crime.

TIPS

Consumers should refrain from using their debit cards for anything other than an ATM card. Use a credit card for all of your card purchases to achieve greater consumer protection.  In addition, you should regularly monitor the bank account tied to your debit card in order to discover as soon as possible if fraudulent use of your debit card has occurred so that you can report it to the bank and limit your liability.

Scam of the day – October 14, 2015 – Trump hotels sued regarding data breach

As I last reported to you on October 2nd, the Trump Hotel Collection, which includes hotels in Chicago, Honolulu, Las Vegas, Los Angeles, Miami and New York just disclosed that its hotels had been hit with a Target-like credit card and debit card data breach that appears to have occurred between May 19, 2014 and June 2, 2015.  Although the Trump Hotel Collection just announced this a couple of weeks ago and much of the media is reporting this as a new story, here at Scamicide, we reported to you about this data breach in our Scam of the day on July 5, 2015.    Now, a lawsuit has been filed in federal court in Missouri seeking class action status on behalf of the affected customers of Trump Hotels.  The lawsuit was filed by the lawfirm Hipskind & McAninch, which alleges that Trump Hotels were negligent in failing to remedy basic data security issues at their hotels, not discovering the data breach until long after it occurred and in failing to notify its customers in a timely fashion which put their customers at extreme risk of identity theft.  As with so many data breaches, it was discovered not by the company hacked, but by credit and debit card processing banks that noticed a pattern of fraudulent use and traced the cards back to the Trump hotels.    The malware used to perform this data breach was installed on computers at Trump hotels front desk terminals as well as as payment card terminals in the hotels’ restaurants and gift shops.  This type of hacking and data breach could have been prevented had the Trump Hotel Collection switched to the modern EMV smart chip credit cards now being required to be used according to credit card regulations that just went to effect yesterday.  Instead the Trump Hotel Collection, as many companies still do, used the old fashioned credit and debit cards with magnetic strips which are so susceptible to hacking.

TIPS

If you are an affected customer and wish to be a part of the lawsuit, you can contact Hipskind & McAninch at info@hm-attorneys.com or by phone at 618-641-9189.  If you used your credit and debit card at one of the affected Trump hotels between May 19, 2014 and June 2, 2015, you should obtain your credit report from each of the three major credit reporting agencies and look for indications of identity theft.  You should also carefully monitor your credit card account and bank accounts for unusual activity.  You should also consider putting a credit freeze on your credit reports, which is always a good idea.  The Trump Hotel Collection is offering free credit monitoring for people who used their cards at their hotels during the time period indicated above although this may be of little value this long after the data breach occurred.  For more information about this offer, call the Trump Hotel Collection at 877-803-8586.  Here also is a link to the statement of the Trump Hotel Collection about this data breach. https://www.trumphotelcollection.com/cc-security-faq

As for the rest of us, there is little that we as credit and debit card users can do to protect ourselves from the security vulnerabilities of the companies with which we do business.  One important thing to do is to refrain from using your debit card except at ATMs.  Using your debit card at retail establishments puts you at a much greater risk of expensive identity theft in the event of a data breach at the company with which you are doing business because of weaker consumer protection laws regarding liability for fraudulent use of your debit card.  Also, if you have not yet received a new EMV smart chip credit card from your credit card company, you should ask your credit card company for a replacement credit card with a computer chip now.