Prepaid Debit Card Reviews, Complaints, Etc

Tag: identity theft

  • IRS Rule Change Targets Identity Thieves

    IRS Rule Change Targets Identity Thieves

    It’s not just big retailers like Target that are grappling with ways to thwart identity theft and fraud. The Internal Revenue Service recently announced plans to limit direct deposits of refunds in an effort to fight criminal activity targeted at taxpayers.

    According to a recent article in Accounting Today, the IRS will limit the number of direct deposit refunds that can go into a single account or prepaid debit card to three. Once the IRS has made three electronic deposits into a single account it will automatically issue paper checks for any additional refunds. Any taxpayer who does reach the threshold of three direct deposits will be notified by the IRS that they’ve reached their limit and will receive only paper checks in the future.

    The new procedures will go into effect in January of 2015 and are meant to make it more difficult for criminals to steal taxpayer identities and hijack their deposits. Currently, an identity thief or unscrupulous accountant could set up an account or obtain a prepaid debit card into which they could funnel multiple tax refunds. “The new limitations will also protect taxpayers from preparers who obtain payment from their tax preparation services by depositing part or all of their clients’ refunds into the preparers’ own bank accounts,” said the IRS in a statement. “The new direct deposit limits will help eliminate this type of abuse.”

    However, the IRS did caution that some responsible taxpayers will be negatively impacted by this change in procedure. For instance, families that file multiple tax returns and have all their refunds direct deposited into a single account will need to either open new accounts or be willing to receive paper checks. Despite the change, the IRS still urges taxpayers to utilize direct deposit. “The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit,” the IRS said. “It is the fastest, safest way for taxpayers to receive refunds.”

     

     

  • The Crime Of Our Century – Prepaid Card Identity Theft

    The Crime Of Our Century – Prepaid Card Identity Theft

    The current boom in identity theft was predictable, maybe even inevitable. It’s a natural result of what we might call “identity inflation.”

    Not so long ago, the information on file about the average American consisted of a fairly small number of paper records, stored in metal cabinets in far-flung offices. People’s financial particulars were usually revealed only to a discreet local banker. Criminal impersonation took time and effort, not to mention lock-picking skills.

    Today, thanks to electronic communication, we routinely share our most sensitive data – whether we know it or not – with people around the world. This information is continuously being collected, organized and stored in cyberspace. All a would-be impostor has to do is locate it.

    By no means are prepaid debit cards immune to this growing threat. In fact, prepaid cards have been involved in some of the most brazen recent cases of identity theft. In May 2013, for instance, the U.S. government alleged that an international ring of crooks had used prepaid cards to loot $45 million from banks in the Middle East. The scheme, as described by the feds, was a blend of high-tech and grass-roots larceny. Hackers “tricked” cards into drastically raising their cash limits. Then a worldwide army of accomplices fanned out to withdraw the money from ATMs before security experts spotted trouble. Most prepaid debit card fraud is not so elaborate. But no one denies that the nature of these cards makes them especially appealing to lawbreakers.

    Crooks are clever
    The well-known 2012 study by the Pew Charitable Trusts noted that “perceived anonymity” is one of the things people like most about prepaid debit cards. And it’s more than just perceived. These cards, once they’re loaded with money, are self-contained spending instruments. Because they are not linked to checking accounts or credit accounts, they don’t help reveal customers’ financial histories or allow for easy tracking.

    An honest consumer’s desire for such anonymity is understandable. But thieves crave anonymity, too, and for all the wrong reasons.

    Taking advantage of the “here-and-gone” potential of prepaid cards, crooks often use them to move ill-gotten funds. More sophisticated scammers, as in the alleged Middle East case, can forge data to temporarily “create” electronic assets, then hurriedly convert them into cash or goods. Once the ruse is recognized, a merchant or financial institution is left holding the bag. Because prepaid card transactions rarely involve big sums, this kind of scheme requires lots of manpower, but recruitment is apparently easy.

    Heists hurt the economy. But should fraud be a concern for you, the law-abiding individual with a prepaid card? Are you personally at risk? The answer, unfortunately, is yes.
    Nationally recognized credit expert John Ulzheimer, no fan of prepaid debit cards, says bluntly, “They facilitate fraud,” he says. “If anyone were to steal or find your card, or otherwise compromise the account information, they could easily use the card or steal its value.” That danger is the flip side of anonymity: A card that acts like cash can be used by anyone. Some cards have fraud protection, but as Ulzheimer points out, many do not.

    What would James Bond do?
    The good news, if there is such a thing, about this fraud vulnerability is that it’s limited. The amount of money on a prepaid debit card is rarely large, and once that money is spent, there’s no more damage the thief can do to you. Ulzheimer acknowledges that “the exposure is relatively low, unless you’re irresponsible and leave the card lying around.”
    Carelessness is obviously foolish. But these days, even ordinary caution may be insufficient. Instead, assume that someone is always spying on you, and treat your prepaid debit card as classified information. Get the safest card you can, especially in terms of fraud protection. Don’t share it or lose sight of it. Don’t even talk casually about having it, any more than you would chat about carrying cash. Use the card only in situations where you feel secure, and beware of bystanders monitoring your actions.
    Don’t feel embarrassed about being vigilant. Scammers who can scoop up millions of dollars in a few hours can bilk you if you give them the least opportunity. If all this talk of identity theft and stolen data makes you feel besieged by mysterious forces beyond your control, Ulzheimer has a realistic reminder about prepaid debit cards. Maybe it’s reassuring. Or maybe not.

    “Most fraud is perpetrated by family and friends,” he says.

  • How to Safely Use Your Debit Card

    How to Safely Use Your Debit Card

    Debit Card Safety Tips

    How to Keep Your Debit Card Information Out of the Wrong Hands

    Bank fees, regulations and credit concerns have forced a countless number of people to turn to debit cards to serve every day banking needs.  With identity theft, cyber-crimes and other criminal activities on the rise, how can you be sure your account information is safe?  Whether you’re shopping online, making a purchase over the phone, or just out for a night on the town, here are some steps you can take to keep criminal activity at bay:

    • Never give out your PIN number or write in on or near your card.
    • Don’t give out bank account information over the phone unless you are the one who initiated the contact or know the person is who they claim to be.  For example, beware of deceptive calls or e-mail phishing schemes from criminals claiming to be from your bank or other entity requiring you to verify (divulge) your account information.
    • Don’t share your PIN or security code and other account information with friends or family who are not authorized users on your account.
    • Take precautions at the checkout counter, ATM machine and gas pump.  Always stand so that no one can see the keypad as you enter your PIN.  At retail establishments, its best to use self scanners.  If you do give your card to a clerk, be on guard against a dishonest employee who runs your card through two scanners instead of one.  The second scanner could be capturing your account information to make a counterfeit card.  In general, be alert for suspicious-looking devices that may be used to “skim” information from your card.
    • If you do use your debit card to shop online, consider extra precautions with your personal computer.  Experts advise installing and periodically updating virus and spyware protection and a “personal firewall” to stop thieves from secretly installing malicious software on your personal computer remotely that can be used to spy on your computer use and obtain account information.
    • Look at your bank statements as soon as they arrive.  Or, better yet, review your account each week by phone or on the internet.  Promptly report any discrepancy, such as a missing payment or an unauthorized transaction, to your bank.  Your quick attention to the problem may help limit your liability and give law enforcement authorities a head start on stopping the thief.
    • When dining out or in any situation that requires your card to be taken out of your sight, make sure the card that is returned to you is yours and not someone else’s.
    • Check your account activity frequently and promptly report any activity that is unfamiliar.
    • Always verify your balance when loading your card.

    For more from this author visit:  Tameka Riley’s Author Page

  • Death, Taxes and Lost or Stolen Debit Cards

    Death, Taxes and Lost or Stolen Debit Cards

    Sadly, losing or having your debit card stolen is commonplace these days. Here’s what to do if it happens

    The stories come out with the consistency of quarterly earnings reports. From Barnes & Noble to HSBC Bank to Zappos, thieves eager to get their hands on customer data are consistently, and successfully, targeting large companies. And for once, this is definitely a case where the news media can’t be accused of sensationalizing a trivial problem. Indeed, just check out these disturbing facts about the prevalence of identity theft.

    A Growing Scourge

    • Identity theft is the fastest growing crime in America.
    • According to the Federal Trade Commission, there are almost 10 million cases of identity theft annually.
    • About 19 million people fall victim to identity theft every minute.
    • Each crime costs the average victim $500 and 30 hours to resolve.
    • A family member or relative, according to one study, perpetrates 32% of identity thefts. The culprits in 18% of cases are friends, neighbors or in-house employees.

    Source: TransUnion: Identity Theft Facts:  http://www.transunion.com/personal-credit/identity-theft-and-fraud/identity-theft-facts.page

    An Ounce of Prevention

    While it’s the big brand names whose security has been breached who get the headlines, the real victims are the customers whose credit and debit card information have been pilfered. What’s even more insidious about the problem is that in many, many instances your physical card will still be snug in your wallet or purse. The upside of our highly digital world is that we can sit in our pajamas and order books, paint, DVDs and steak knives from online retailers like Amazon or Wal-Mart without handing over our debit card to a clerk. The downside, of course, is that when crooks get access to our account details, they can do exactly the same thing.

    Obviously, the question is what to do should your debit card information fall into the hands of a criminal. But herein lies one of the most vexing problems with identity theft: if you still have possession of your debit card, how in the world will you even know that a criminal has struck? Well, it might sound a bit like your mother telling you to eat your vegetables, but the Federal Trade Commission offers up a slew of tips on how to minimize what can be significant damage caused by identity theft. Here are just a couple of their ideas:

    • Check your ATM or debit card transactions. Unless you’re Paris Hilton or Nicolas Cage, you likely know how you spend your money. If there’s a fishy looking charge, look into it. “The more often you check it the better,” says Dr. Mary Ann Campbell, a CFP who teaches personal and family finance at the University of Central Arkansas and runs the web site www.moneymagic.com. “With free programs such as mint.com, you are able to check balances daily on a smart phone.”
    • Don’t help the criminals. This may sound painfully obvious, but never give your account information over the phone unless you’re the one who has initiated the call. And never, ever respond to an email asking for your account details for verification purposes. Credible companies simply don’t do this.
    • No carte blanche. Never, ever sign a charge or debit slip that is blank. The amount that someone fills in afterwards may shock you.

    Source: http://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards

    As the federal agency that seeks to protect consumers from identity thieves, the Federal Trade Commission maintains a treasure trove of information about the problem and provides lots of helpful tips to prevent or respond to it. So by all means, visit the FTC website.

     

    When it Happens

     

    There is one sure-fire way to avoid being a victim of identity theft: live in a cave and cut up your debit cards. For the rest of us, even the most hardcore preventative measures won’t eliminate the risk – that is, unless you can somehow fortify the data storage of every single retailer you’ve ever done business with.


    With that unfortunate reality in mind, remember that how you respond will largely determine just how damaging and costly identity theft will be. The most important thing to remember is to report the loss of your debit card immediately to the bank. For this very reason, banks have 24-hour emergency phone numbers. If you determine your card was stolen at 2 a.m., you are better off reporting the card stolen then. Who could sleep, anyway? “Act fast! Be prepared like a good boy or girl scout and already have a copy of your debit card front and back,” says Campbell. “Or your debit card information copied in your phone or computer, particularly the 800 number to contact to let them know the card has been lost or stolen.”

     

    Even though calling in the middle of the night can be a hassle, waiting until morning could allow for numerous unauthorized charges and make an already big mess more difficult to clear up. What else can you do? Try these steps:

    Grab your laptop. You should log into your online bank account as soon as you can and carefully review all debit card activity. Since transactions are typically reported immediately, all the fraudulent charges should already be posted. Take note of each and every one so that you can report them to your bank. (Note: If the merchant put the transactions through as credit instead of debit, they may not appear right away).

    Be a pain. There are times in life when it makes sense to be polite and reserved. This is not one of those times. Follow up with your bank daily until the issue is 100% resolved. As Dave Ramsey may say on his radio show, “Make calling the bank your job.” You may also hear him say to “make calling the bank your goal in life.” In other words, call the bank every day, even multiple times a day until the issue is resolved to your satisfaction. The bank will close your debit card account and issue you a new card. But until all the fraudulent charges are removed, you should stay in close contact with your bank. Along the way keep meticulous records of emails, correspondence and phone calls, including the name of the person at the bank you spoke to.

    See if you’re covered. Dust off your renters or homeowners insurance policy and read the fine print — some policies cover card theft. And for future reference, keep the fact that some policies do cover it in mind and consider adding it to your policy.

    Know Your Rights

     

    While it’s important to act thoroughly and fast if your debit card is stolen, it is also important to arm yourself with knowledge about your rights under the law. The most important thing to know is that, under federal law, your liability is limited, although your level of protection against unauthorized charges varies. It depends on the type of card used and how quickly you report the loss. The difference can be substantial. Early reporting can limit your loss to $50. But, after two days, the maximum loss allowed jumps up to $500.

     

    To be more specific, the federal laws that offer consumer protection when your debit card is lost or stolen are the Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA). Not only is FCBA the reason your liability for unauthorized charges capped at $50, it also says that if you report the card lost or stolen before it’s ever used, you won’t be liable for any charges whatsoever. When it comes to your debit card, EFTA protects you from some liability. If the card is used before it’s reported lost or stolen, uh-oh, you may have some inescapable losses. Here’s what you could be out of pocket:

     

    HOW QUICKLY YOU REPORT THE PROBLEM YOUR MAXIMUM LOSS
    Before any fraudulent transactions have been made $0
    Within two business days $50
    Two to 60 business days later $500
    More than 60 business days later All the money taken from your ATM/debit card

    Source: http://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards

     

    There is a caveat to all this. If your debit card number is used, but the card itself isn’t stolen, you have 60 days to report the charges as fraudulent.

     

     

     

Prepaid Debit Card Reviews, Complaints, Etc