Debit card safety

What to do if your debit card is lost or if you suspect fraud:

• Report the Loss: As soon as you realize your debit card is missing, contact your financial institution. Quick action is crucial, as it legally protects you from major losses due to unauthorized charges.
• Lock Your Card Temporarily: If you think you might have just misplaced your card and believe you’ll find it soon, ask your financial institution about temporarily locking your card. This option can buy you time to locate the card without needing a replacement.
• Cancel and Replace: If you can't find the card or believe it's stolen, cancel the card immediately. Your financial institution will issue a new card, which may take up to a week to arrive unless you request expedited delivery, which might come with an additional fee.
• Keep Records: When you report your card lost or stolen, make sure to record any confirmation numbers provided by your financial institution. This documentation is essential for tracking the status of your account and for future reference.

Monitor your account for unauthorized transactions

• Inspect Account Activity: Log in to your financial institution’s online portal or mobile app to review recent transactions. Look for any suspicious or unauthorized charges. If you find any, note down the details—amount, merchant, location, and date—and report them to your financial institution immediately.
• Daily Monitoring: Regularly checking your account can help you spot any fraudulent activity early. If you notice anything suspicious, report it to your financial institution right away.

Follow up with written confirmation

• Document Your Report: After your initial phone call to the financial institution, follow up with an email, letter, or secure message via your financial institution’s online or mobile app. Include the date and time of your original report and details of any unauthorized charges. This written confirmation can be crucial if your financial institution conducts an investigation.
• Maintain a Record: Keep a copy of all correspondence for your records. If the financial institution requests documentation during their investigation, having this information handy can ensure you are credited for any fraudulent charges.

Notify credit bureaus and consider a fraud alert

• Place a Fraud Alert: Contact the three major credit bureaus—Equifax, Experian, and TransUnion—to add a "Fraud Alert" to your credit file. This alert advises creditors to take extra steps to verify your identity before extending credit, helping to prevent further fraud.
• Consider a Credit Freeze: For added security, you might want to place a credit freeze on your account. A credit freeze restricts access to your credit report, making it more difficult for identity thieves to open new accounts in your name.

Understand your liability and protections

• Debit Card Protections: Federal law limits your liability for unauthorized debit card charges based on how quickly you report the card as missing. If you report the loss within two business days, your liability is capped at $50. If you delay, it could rise to $500 or more. It’s crucial to act quickly to minimize your risk.

Request and review your credit report

• Obtain Your Credit Report: You’re entitled to a free credit report from each of the three major credit bureaus every year. Visit annualcreditreport.com to request your reports. Reviewing these reports can help you identify any fraudulent activity, such as new accounts opened in your name.
• Dispute Inaccuracies: If you find errors or evidence of fraud on your credit report, dispute them with the credit bureau. This process helps correct your credit file and prevent further issues.

Update automatic payments

• Change Payment Information: If your lost debit card was used for automatic payments, update your payment details with your new card information. This step ensures that your payments continue without interruption and prevents missed payments or late fees.

Take steps to protect yourself in the future

• Keep Information Accessible: Write down your card’s customer service number and account information and store it in a secure location. Having this information readily available can make it easier to report a lost or stolen card quickly.
• Practice Good Security Habits: Use strong, unique passwords for online banking, enable two-factor authentication, and be cautious when sharing personal information. Regularly monitor your accounts to catch any suspicious activity early.

Here are 10 places and situations where it can pay to leave that debit card in your wallet:

1. Online.  Since the debit card links directly to a checking account, don't use a debit card online, you have potential vulnerability there.  If you have problems with a purchase or the card number gets hijacked, a debit card is "vulnerable" because it happens to be linked to an account.  Also includes phone orders in this category.
   The Federal Reserve's Regulation E  (commonly dubbed Reg E), covers debit card transfers. It sets a consumer's liability for fraudulent purchases at $50, provided they notify the financial institution within two days of discovering that their card or card number has been stolen.
   
2. Big-Ticket Items.  With a big-ticket item, a credit card is safer. A credit card offers dispute rights if something goes wrong with the merchandise or the purchase. With a debit card, you have fewer protections.  In addition, some credit cards will also offer an extended warranty. And in some situations, such as buying electronics or renting a car, some credit cards also offer additional property insurance to cover the item.
   
3. Deposit Required.  When renting something and it requires a deposit.  This is where you want to use a credit card instead of a debit.  That way, the store has its security deposit, and you still have access to all of the money in your bank account. With any luck, you'll never actually have to part with a dollar.
   
4. Restaurants.  In restaurants, you have so many people around.  The danger: restaurants are one of the few places where you have to let cards leave your sight when you use them. But others think that avoiding such situations is not workable.  The conventional advice of  'don't let the card out of your sight' - is just not practical.  
   The other problem with using a debit card at restaurants is: Some establishments will approve the card for more than your purchase amount because, presumably, you intend to leave a tip. So the amount of money frozen for the transaction could be quite a bit more than the amount of your tab. And it could be a few days before you get the cashback in your account.
   
5. You're a New Customer.  Online or in the real world, if you're a first-time customer in a store, skip the debit card the first couple of times you buy.  That way, you get a feel for how the business is run, how you're treated and the quality of the merchandise before you hand over a card that links to your checking account.
   
6. Buy Now, Take Delivery Later.  Buying now but taking delivery days or weeks from now? A credit card offers dispute rights that a debit card typically does not.  But be aware that some cards will limit the protection to a specific time period. So settle any problems as soon as possible.
   
7. Recurring Payments.  We've all heard the urban legend about the gym that won't stop billing an ex-member's credit card. Now imagine the charges aren't going onto your card, but instead coming right out of your bank account.  Another reason not to use a debit card for recurring charges: is your own memory and math skills. Forget to deduct that automatic bill payment from your checkbook one month, and you could either face fees or embarrassment (depending on whether you've opted to allow over-drafting or not). So if you don't keep a cash buffer in your account, to protect yourself from over-limit fees, you may want to think about using a credit card for recurring payments.
   
8. Future Travel.  Book your travel with a debit card and they debit it immediately. So if you're buying travel that you won't use for six months or making a reservation for a few weeks from now, you'll be out the money immediately.  Another factor is that hotels aren't immune to hackers and data breaches, and several name-brand establishments have suffered the problem recently. You don't want your debit card information to sit in a system for four months, waiting for you to arrive.
   
9. Gas Stations and Hotels.  This one depends on the individual business. Some gas stations and hotels will place holds to cover customers who may leave without settling the entire bill. That means that even though you only bought $10 in gas, you could have a temporary bank hold for $50 to $100.   The same can go for hotels, where there are sometimes holds or deposits in the hundreds to make sure you don't run up a long-distance bill, empty the mini bar, or trash the room. The practice is almost unnoticeable if you're using credit, but can be problematic if you're using a debit card and have just enough in the account to cover what you need.  At hotels, ask about deposits and holds before you present your card. At the pump, select the pin-number option, which should debit only the amount you've actually spent.
   
10. Checkouts or ATMs That Look 'Off'.  Criminals are getting better with skimmers and planting them in places you'd never suspect.  So take a good look at the machine or card reader the next time you use an ATM, vending machine,  metro card machine, or self-check lane at a retail store. Does the machine fit together well or does something look off, is the machine not processing your payment? Make sure it doesn't look like it's been tampered with.