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4th Day: Holiday Shopping Quiz – Is Credit or Debit Smarter?

Holiday Security Tips: On the fourth day of Christmas, the experts gave to me, 4 pay solutions!

True or False?

When you use a debit card, funds are more secure because they are drawn directly from your bank.

False.  While it’s true that funds are drawn directly from your bank, it actually makes it harder to get the money reimbursed while the issue is being resolved if fraud does occur.

 You can receive a reimbursement for debit card fraud up to a year later.

False.  Debit cards generally only reimburse fraudulent purchases if you catch them within 60 days.

 It is safer to use a credit card than a debit card.

True.  When you use a credit card, nothing is withdrawn from your bank account immediately. Pending transactions can take several days to clear. In addition, credit cards uniformly give you more protection than debit cards and your maximum liability is capped at $50.

All checks are created equal.

False.  If you have to pay by check, make sure you use high security checks. Security checks should include visible fibers, true watermarking, full-feature hologram (like on credit cards) and protection against multiple chemical alteration agents (not just fingernail polish remover).  This makes it much harder for identity thieves to “wash” your checks with acetone and put their own names in the “pay to” field. Also, sign your checks with a gel-based pen that cannot be easily dissolved.

If you failed this quiz, don’t worry, as long as you remember the answers when you’re shopping!  Wishing you straight A’s this holiday season! On the fifth day of Christmas…

To review our tips from previous days, click here.

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Entire Town in Colorado Has Identity Stolen

In a town with a population of about 3,000 people it seems that almost all the citizens of Bennett, Colorado have had their identity stolen. The scheme was simple and it was easy to fall victim. Identity thieves apparently used skimmers to extract credit and debit card numbers from individuals. Skimmer scams can happen when the criminal installs a “skimming” device over the card slot of an ATM, debit or credit card reader. The skimmer then reads the magnetic strip as the user unknowingly passes their card through it.

In the case of Bennett, Colorado it is believed that this was done at a local King Soopers gas pump. The skimmer is gone now and authorities are on the hunt for the thief.  King Soopers has denied that any of the fraudulent activity happened at their gas pumps and authorities have also said that they knew this was a crime spree for the past few weeks. In the meantime, many of the victims who used debit cards are without those funds because its the same as using cash. The average amount stolen was around $700 and more people are coming forward every day.

There are many ways you can make sure that you don’t become a skimmer victim.

  • Make sure that you always use a credit card instead of a debit card. Credit card companies are better prepared to handle fraudulent charges and it does not directly affect your ash flow. If you use a debit card, you are losing that cash immediately and have to prove your innocence to get it back.
  • Always examine the credit card machine or ATM where you are sliding your card very carefully. Usually you can tell if it looks funny or has an extra attachment . If you are at all suspicious, don’t use it. Go inside of you bank to withdraw funds until you are comfortable that the ATM is safe, or pay inside of the gas station rather than at the pump.
  • Don’t use your debit card at restaurants, as this is another prime place for theft. Instead, use your credit card and set up credit card account alerts that text or email you immediately when you make a purchase. If’ it’s a fraudulent charge, you will catch it very quickly.
  • Use Cash. This is the simplest way to protect yourself form this type of fraud.

John Sileo speaks professionally on identity theft. His clients include the Department of Defense, Homeland Security and many municipalities that have successfully avoided the types of thefts in Bennett, Colorado by educating their citizens.