Card processors are everywhere, making paying by debit a breeze for customers with bank accounts. Recognizing the frequency with which this form of payment is used, fraudsters targeted debit cards last year, resulting in a sharp increase in reported breaches, according to newly released statistics.
In 2017, the number of compromised debit cards increased 10 percent, based on recent FICO analysis. Also, the compromised ATM and merchant device count rose 8 percent from 2016.
"3 in 4 consumers use debit cards to make payments."
TJ Horan, FICO vice president of fraud solutions, noted debit-related breaches have never been more prevalent than they are today.
"The number of compromises and the number of card members impacted set a new record last year," Horan explained in a press release. "While most devices are safe, fraudsters are developing new technology and methods for hacking ATMs."
Consumers these days have a variety of options to pay for goods and services, with debit being chief among them. Seventy-five percent paid with debit in 2016, the most recent year for which data is available, with 87 percent spending with cash, according to Blackhawk Network cash still the most common form, though not as prevalent as in yesteryear. In 2016, the most recent year for which data is available, 75 percent used debit on at least one occasion, according to Blackhawk Network. Eighty-seven percent spent with cash.
Vigilance is paramount
In order to guard against being preyed upon, Horan advised consumers must be vigilant about their debit card use and should perform their due diligence by keeping tabs on their checking accounts to ensure that everything looks accurate. Unauthorized withdrawals should be flagged immediately and brought to banks, merchants or other financial institutions' attention.
It's no coincidence that as payment varieties have risen, financial security incidents have followed suit. Perpetrators today have a broader swath of payment vehicles to exploit, evidenced by fraud incidents reaching an all-time high in 2017. Indeed, 84 percent of executives acknowledge they, too, were impacted by fraud in 2017, according to analysis conducted by risk solutions provider Kroll. That's up from 82 percent in 2016.
Data-based fraud also affected everyday consumers at an unprecedented rate in 2017, not just through debit cards. There was an 8 percent increase in identity theft last year, according to calculations conducted by Javelin Strategy & Research, costing victims approximately $16.8 billion.
Although the boom in payment vehicles gives scammers a larger pool of potential victims, consumers and business owners have more tools to keep themselves protected, Javelin Strategy & Research fraud and security expert Al Pascual noted.
FICO offered consumers a few awareness strategies that can be helpful:
Contact card issuers immediately
Issuers aren't just there to facilitate a transaction; they're also available for customer assistance and assurance. If you lose your ATM card or have reason to believe it was compromised, inform the issuer about your suspicions and ask for a new card and number.
Get into the account checking habit
Online and mobile device tools have made due diligence a snap, but all too often, debit and credit card users fail to utilize them. Log on and take a peek at your account frequently to ensure there haven't been any unauthorized transactions.
Be cautious when withdrawing money from ATMs
ATMs get patronized regularly, many open and available 24 hours a day, seven days a week. Before withdrawing cash, ensure no one is peering over your shoulder or invading your personal space. Also, if an ATM looks old, outdated or unusual, steer clear and use one that your financial institution owns or may be affiliated with.
Your customers can protect themselves from the potential for fraud, but merchants can make the payment process more seamless and safe for their customers by investing in the proper card processing software. 911 Software, Inc. has the tools that can help thwart data theft.