Debit card fraud

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Police chief, bank president give advice

By Rich Bauer, Managing Editor

Area residents who use debit cards from their banks should be checking their bank accounts to make sure their cards haven’t been used by others for purchases in other states.

That advice was given by Vandalia’s police chief and a local bank president after the discovery of local debit cards being compromised.

Police Chief Larry Eason said on Monday that his department had heard from 25-30 residents who had learned of fraudulent purchases on their debit cards.

“What we’re telling people is that they need to report it to their banks immediately,” Eason said.

Ernie Chappel, president of First National Bank in Vandalia, Ramsey, Patoka, Greenville and Mulberry Grove, also issued that directive.

First National Bank is one of several area banks that have learned that customers’ cards had been compromised in recent days. Chappel said reports indicate that information from area debit cards have been used in four or five states.

What happens when a card is used fraudulently is, “We’re notified, the customers are notified and the card is canceled,” Chappel said.

“The customer is then issued a new card,” he said.

First National plans to send out a memo to its customers within the next week or so to inform them about local debit cards being compromised.

One of the biggest questions posed by those whose card is compromised is whether that bank customer can recover the funds spent fraudulently.

“At no time is the customer at risk,” Chappel said. “The bank reimburses the customer’s account.”

He said banks are often asked why they don’t prevent this kind of theft.

“All banks have no control where their customers use their cards, and we have no control over the security measures that businesses take, such as how they store their information,” Chappel said.

He did not that within the past year, FNB has put into place additional security measures for debit cards.

“We track our customers’ buying habits, such as the businesses that they regularly use, and if we see that the card is used for a purchase, say, in Florida, we contact the customer to check that purchase.

“Obviously, the system isn’t foolproof, but we have taken, and will continue to take, security measures that reduce the chances of something like this from happening,” Chappel said.

It’s not unusual for debit cards to be compromised. Last fall, Chappel said, a lot of banks in Nebraska re-issued debit cards to all of their customers because of a large-scale case of debit card fraud.

Even if a person’s debit card is compromised, Chappel said, that individual doesn’t have to worry about identity theft.

“The debit card contains information related to that card only. It doesn’t contain such information as that person’s bank account number,” he said.

Chappel said debit cards actually contain less information than checks. “Checks contain more information about the person, such as the account number and the person’s address,” he said.

This can be a learning experience for everyone, Chappel said in offering some.

“People should regularly monitor their accounts, and if they see something that’s not right, they need to notify their bank immediately,” he said.

“Also, if people are going to be traveling, it’s a good idea for them to notify their bank, to make sure that they can use their cards at their destination,” Chappel said.

There are some states, he said, where debit cards cannot be used by anyone unless the individual has his or her bank unlock their card in those areas.

People are also advised to keep all personal documentation in a secure place, and to shred all personal information, such as bills, bank statements, ATM and debit card receipts, and credit card offers.