Debit card security: Things you should know to protect your account

Debit cards are becoming more and more popular these days. However, many people worry about debit card security.

Debit cards can be linked to a large amount of money in an account, unlike credit cards which have a capped credit limit. The thought of debit card fraud can be worrisome, which is why most debit cards contain security features to prevent debit card fraud.

Rates last updated September 25th, 2018
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ING Orange Everyday Account
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Visa Debit Card $0 $0 ING charges no ATM withdrawal fees and offers a rebate on any third-party ATM fees and international transaction fees when you deposit $1,000 and make 5+ card purchases a month. Go to site More
NAB Classic Banking
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HSBC Day to Day Transaction Account
HSBC Day to Day Transaction Account
No monthly account fee with no minimum deposit. Your Visa debit card unlocks special privileges worldwide with the HSBC home&Away Privilege Program. Visa Debit Card $0 $0 $0 account keeping fees. Unlimited free withdrawals at over 13,000 HSBC ATMs. Go to site More

What are the types of debit card fraud?

There are a number of forms of debit card fraud, ranging from impersonation to creation of false details. However, the two type of debit card fraud that affects users the most are impersonation and theft.

Theft is a straight forward form of debit card fraud - the user's card is stolen and used by the fraudster. Impersonation is similar to theft but instead of really using the customer's debit card, the fraudster "impersonates" the card - often an identical card is issued, or the card number and details are used for purchases and cash withdrawals.

How can I prevent debit card fraud?

To prevent debit card fraud, most card issuers use the "chip and pin" system. This system was first introduced in the UK market and experts estimate that it reduces debit card fraud by up to 80%. This system is gradually being introduced in Australia and by 2015, all cards whether debit cards or credit cards, will be using this system.

The chip and pin system requires the user to enter a PIN number during transactions, instead of signing. The PIN is mailed to the user separately, a few days after he or she receives the card - there is a few days difference in mailing the PIN, so that the mail cannot be easily intercepted. Users can further increase their debit card security by altering the PIN number to some other number that they prefer. Due to the use of a PIN number, fraudsters need to know both the card details and the pin, which makes impersonation or theft more difficult, thereby reducing debit card fraud.

Most banks also use algorithms to spot any possible card fraud. These algorithms note any sudden, unusual expenses or steep increase in expenses. They also note whether the card is used in two locations quite far from each other, within a very short period of time. These algorithms automatically spot anomalies, which causes the bank to contact the cardholder to verify the transactions.

Most card issuers, including Visa and Mastercard offer a zero liability guarantee, which means that cardholders are not liable for any unauthorised transactions, if those transactions are noted in time - so one of the final steps to enhanced debit card security is to always read your card statement carefully and notify your bank of any suspicious activity.

Shirley Liu

Shirley Liu is a program manager at finder, formerly the publisher for Banking and Investments. She is passionate about helping people make an informed decision, save money and find the best deal for their needs.

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