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Keeping Your Money Safe – Not All Chip Cards Are Created Equal

Fraud… we hear a lot about it today, but do we really understand how it is impacting us daily?  We hear something in the news and do not really think a lot about it sometimes.

The other day, I filled my car with gas.  I pulled out my trusty credit card, put in my zip code, and filled up my car.  Easy, right?

I never gave much thought to anyone being able to do anything with my card information at a local country store just getting gas.  After all, the store owner was inside smiling as usual, and the typical patrons who sit around and tell daily ‘fish’ stories were there too.

So, the surrounding seems safe enough.  But, someone apparently put a skimmer on the gas pump, and they were able to get your card information!    To be clear, it was not the owner of the station but someone else who placed the skimmer on the pump.  After all, the pumps are outside, and anyone can get to them.

Before I got home (I live 2 miles away), I received a text from my bank asking me if I was trying to make an online purchase from Wal-Mart in Arkansas.  So, the fraud departments at banks are doing a good job and trying to prevent fraud for all of us, so be patient with them!

Fraudsters take us for billions (yes, that word is plural) of dollars each year.  And, a lot of that money either is not caught by us and we pay for it, or we report the charge as not being ours to the bank.  Then, the bank has to either go after the merchant for the money (which honestly, was far and few who gave a credit), or the bank had to pay by writing off the loss and giving us the credit.

So, you may think you should just write checks.  As Frank Abagnale said in a conference I attended, “Why would you give your checking account number and possibly your full name, address, and some of you still have your social security number and phone number on the check, to a perfect stranger?”

Mr. Abagnale believes that because the punishment for fraud and recovery of stolen funds are so rare, prevention is the only viable course of action. You need to be more vigilant about your transactions if you are using too many credit cards.

With a credit card, if you see a charge you did not make, you need to immediately notify the merchant for a credit.  If the merchant does not agree, you need to notify the bank (check your bank provider of the timing) typically within 60 to 90 days in order to be credited back for the charge. The bank will go back to the merchant and make them prove the charge is correct and/or give a credit back for the charge

On October 2015, the liability shifted and helped push chip and pin cards out in the market.  Meaning, the liability is now on the merchant if someone uses your card, and they have not properly identified you.

So, when you see a merchant who does not have a chip reader yet, or they do not check when you insert the card and do a signature, they are at risk, not you.  Now I know you grumble when someone says chip and pin, but let me explain those types of cards and how chip and pin are helping.

There are 2 types of credit cards out in the market today – a regular magnetic strip card and a combo magnetic strip and chip card.  Now to be clear, all ‘chip’ cards are not created equal.

Robin Anderson
Robin Anderson
ROBIN Anderson earned her BBA and MBA from Averett University and graduated with a 3.88 GPA. She is also a member of the Pinnacle National Honor Society and a member of the Institute of Financial Operations as well as served on the Strategic Advisory Committee for several years and has been a speaker for 4 years at the National Convention. Robin also speaks for the IOFM, AP Now and Tomorrow and Averett University. Robin volunteers her time with organizations such as the American Cancer Society, the ALS Association, and speaking for Averett University.

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