As the holiday shopping season is in full swing, over the next month I will be warning you about the latest scams and identity theft schemes related to holiday shopping, both in brick and mortar stores and online. Today, I will start with shopping in a store. Most of us use either a debit card or a credit card when shopping in a store. The biggest risk when using either card occurs when a criminal clerk takes your card of either variety and swipes it through a small device, no bigger than the palm of your hand, called a skimmer. This device will steal all of the information from your card and store it for the identity thief behind this scam to use either for purchases online using your credit or debit card number or by actually taking the information and imbedding it on a phony credit card.
The first thing you should do is retire your debit card to use only as an ATM card. While federal law limits the amount that you are liable for when fraudulent charges are made using your credit card to no more than $50, with a debit card, if you do not recognize that your account has been compromised right away, potentially the identity thief could empty the entire bank account tied to your debit card. In addition, even if you do notice the fraudulent use immediately, your account will be frozen while the bank does its investigation into the matter, thereby limiting your access to your funds. As for the danger of skimmers, you should watch your credit card every minute that the clerk has it in his or her possession to make sure that he or she only swipes it through the store’s credit card processor and doesn’t do that extra swipe through a skimmer.