Thief Buys $812.28 In Shoes Using Personal Finance Columnist's Stolen Identity

A Washington Post personal finance columnist got her identity stolen and someone tried to use it to buy $812.18 worth of running shoes. Somehow, the thief had gotten access to the Nancy Trejos personal information and stolen her Bank of America debit card number. The crook placed an order online with the store and arranged for an in-store pickup. The clerk grew suspicious when the woman couldn’t produce the card used to place the order.

Trejos thinks that it might be because she uses her debit card all the time as a way to reduce spending….

The idea is that the more immediate the financial impact, the more frugal you behave. Which is true, but in the event your debit card is stolen, you have fewer protections than with a credit card. Your liability is limited to $50 if you notify your bank within 2 days. After that, it’s $500. And if you wait longer then 60 days, you could lose it all. Furthermore, with a debit card, it’s your money that’s stolen, and you don’t get it back until the investigation is concluded in your favor. With a credit card, only the bank is out the money. And with a credit card, your maximum liability is $50.

So while debit cards might be good for people trying to reduce spending, they open one to more costly identity theft. Instead of using a debit card for these purposes, switch to a cash-based system and only use it take money out of the ATM.

FURTHER READING: Credit, ATM and Debit Cards: What to do if They’re Lost or Stolen [FTC]
Identity Theft Gets Personal [Washington Post]
(Photo: Ben Popken)

Comments

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  1. full.tang.halo says:

    Debit Cards FTL, seriously people, all the risk non of the rewards, it’s like waiting for bad sex.

  2. protest says:

    i want to use debit to reduce spending but things like this just reinforce the idea in my mind that it’s not the wisest option. screw the plastic, from now on it’s going to be cash, $100 at a time.

  3. timmus says:

    Well, we bank with a small state bank and fortunately they’ve been great about cancelling two bogus charges. Five years ago when I was with Bank of America they just shrugged their shoulders at some unauthorized charges and I had to deal with the billing company to get them removed. That’s the primary reason I dropped Bank of America.

  4. davebg5 says:

    Is it me or does it seem as if every other case of a stolen ID related to a credit or debit card is a BOA account?

    I wonder if that’s just a statistical quirk as a result of how many customers BOA has or if it’s a reflection of BOA’s (seemingly lax) security.

  5. Myotheralt says:

    @davebg5: I get email warnings that my account may have been compromised, but i dont even have a boa account

  6. DeeJayQueue says:

    This is just my personal two cents about debit cards:

    I personally like them. They do encourage frugality and provide a great way to track purchases. I only have cash for tolls, and I keep that in my car as quarters in a cup. I’m able to instantly see what I’ve spent on everything from food to gas to bills, right on my bank statement, which I check at least 2x a week, mostly once a day from work. If there were a problem I’d catch it right away, unlike with credit cards which you only get the bill for once a month, and by then it may be too late to catch someone who’s cloned your card.
    In fact, the only time I run into problems is when I use it as “Credit” like at a restaurant or gas station that doesn’t take debit cards. Then it takes like 3 days to show up on my statement.
    No, I don’t have the same level of fraud protection as with a bona fide credit card, which puts the onus on me to keep track of things, which is sort of how I like it.

  7. FLConsumer says:

    Just say NO to debit cards, pure & simple. Unless you have substantial cash reserves in other bank accounts, you simply can’t afford a debit card. Chances are that if you have such reserves, you probably already have a credit card and are relatively responsible ‘though.

    Can’t manage a credit card safely? Stay away from plastic entirely until you learn how to. Can you really afford to be out $800 at a time until the bank figures out whether or not they’re going to screw you over?

  8. NeoteriX says:

    @myotheralt:

    You might want to check on that… You may be receiving phishing messages (which you want to report) or someone may have signed up a bank account with your stolen identity.

  9. Colin says:

    Isn’t it possible with many debit cards to switch them to debit only — no non-pin purchases? Wouldn’t that be a more secure alternative that would still give you the benefits of having the money gone from your account right away?

  10. FLConsumer says:

    @DeeJayQueue: How/where do you only get a single monthly statement for a credit card? If that’s the case with yours, get a different card! All of my credit cards have online access and show transactions almost immediately (as in restaurant charges show up by the time I get home to check my account.) That’s how I’ve noticed the VIP TUNE thing and also noticed Enterprise rent-a-car billing me and the dealer for the car. Both happened and were corrected before I ever received the actual paper statement from my bank.

  11. GearheadGeek says:

    @DeeJayQueue: Most credit cards provide a similar online access to charges since your last statement period, so if you used a single credit card to manage your monthly expenses (I do) and pay it off at the end of the month (I do that also) then you have most of the benefits you listed without the risk downside if your card is compromised. You DO often have a longer lag before charges show up than you do with a debit transaction, but since it’s not sucking money out of your checking account, it’s less critical. Plus you can get rewards cards that pay you back in cash or miles, etc.

    I’m not saying that it’s irresponsible to manage your finances with a debit card, just that it’s not the only responsible way to do it.

  12. DeeJayQueue says:

    @GearheadGeek: I agree, but there’s so much haterade towards debit cards.

    I personally have shit credit and don’t want the hassle of having a low balance, high interest or semi-secured card that hits me with fees all over the place. Not everyone can get a good credit card, but everyone who can get a checking account can have a debit card. In fact my job started giving them out to people who didn’t have direct deposit already.

  13. forgottenpassword says:

    I figure there are two ways she got her debit card info stolen. From using it in a “compromised” atm (or gas pump) with a false facade, card reader & hidden camera mounted …. OR it was skimmed & her pin # witnessed by an unscrupulous cashier/waiter.

    That’s what can happen when you use your debit card a lot in lou of an ACTUAL credit card, cash or check.

    I NEVER use a debit card anymore. I much prefer to use a credit card in case something goes wrong… its the credit card’s money that is screwed with & not my own in my banking account.

  14. forgottenpassword says:

    @forgottenpassword:

    correction: for some reason I thought they got her pin # …. guess I was wrong. Well then in that case its even easier to use her card. I still stand behind my “two ways”. I read a while back that the majority stolen debit/credit card info is not from online use, but from everyday use in the real world.

  15. skotty4 says:

    I use my Amex gold card for every purchase. Milk, CD’s, paying my cell phone bill…everything. I almost never use my check-card. Using the amex ‘charge’ card, im protected for every purchase, and there are no APR’s to deal with. Lets not forget there is a difference between a charge card and a credit card.

  16. BoorRichard says:

    I have a VISA-branded credit/debit card from my bank. Whenever I use it, the cashier asks, “Credit or Debit?” And I always run the transaction as a credit card. The bank charges me a fee if I use it as a debit card.

    Serious questions:

    (1) If someone skims my credit/debit card and uses it as a credit card, do I have the usual full VISA liability benefits?

    (2) Why would my bank discourage me from using the card as a debit card if debit cards are such a sweet deal for them?

  17. courtneywoah says:

    I use my debit card for everything, have been doing so for 5 years to keep track of my purchases. I check my transaction history every day, probably a couple times a day (or my girlfriend does) so we would know if our account was compromised immediately. Although it may be safer, there is no way I am using a credit card to pay for all of my purchases, god forbid I get ahead of myself and overspend. I think that it is perfectly safe to use your debit card as long as you are aware of the risks.

  18. Buran says:

    @davebg5: Consider how big BoA is, and statstically you’ll see a lot of these.

  19. SarcasticDwarf says:

    I use a pretty simple strategy and I am not sure why people have so many issues. I have two credit cards (one AMEX for large purchases and a Visa for everything else that also gets miles). I have one debit card. Both are through the same bank so it is easy to check the balance quickly. The ONLY time I use my debit card is at the grocery store as it is faster (no receipt to sign).

  20. Parting says:

    @forgottenpassword: You forget internal fraud. It could be done by bank’s employee or an employee of a company that has access to her financial info (like pre-authorized monthly debits).

    I had once fraud on my credit card. It could come only from internal fraud, because I used it only to automatically pay bills.

  21. bdsakx says:

    This is why I still love cold hard cash to make everyday purchases like lunch, groceries, gas, etc. because it’s untraceable, and companies can’t build a spending profile on me and then use it against me for some evil marketing reasons.

  22. rjhiggins says:

    @myotheralt: Those are almost certainly phishing scams. NEVER respond to an e-mail asking you to confirm or update your financial information.

  23. SadSam says:

    Ugh, I’m not anti-credit card (although I don’t use mine except for biz travel) but I’m bummed that debit cards are getting a bad rap. If you’ve got a Visa branded debit card you’ve got the same protection as you would with a Visa branded credit card.

    From the Visa web page.
    Visa’s Zero Liability policy took effect April 4, 2000, and is a great improvement on the previous policy. The former policy required that you report fraudulent activity within two business days of discovery. After this two-day period, you could be held responsible for up to $50 of the unauthorized charges. With the new Zero Liability policy, you’re no longer required to report fraudulent activity within two days and you’re not responsible for any fraudulent transactions made over the Visa network.

    The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network-online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

    As long as you use your Visa branded debit card as a credit card (do not enter the PIN number) you’ve got the same protection.

  24. gingerCE says:

    I also think debit cards get a bad rap. My sis had her debit card stolen. She went to her bank. They refunded all of the fraudulent purchases that day–she did the paperwork inside the bank. Someone I know had $1000 taken from her account via her debit card. She went into the bank. It took 3 days (went in on Saturday) and she was refunded 100% the money BUT they did give her provisional credit immediately for the amount taken out to ensure all of her bills would be paid.

    When I got my new debit card (Mastercard) in the mail it came with a brochure that clearly stated I would get fraud protection etc . . .

    Debit card usage for the first time actually surpassed credit card usage for purchases. People want to use their debit cards but they won’t if misleading or old information gets out on the web (like this article). Some people despise credit card companies and while cash is great–it’s not as practical as it once was. Hence, the debit card, which really helps those who have yet to establish credit or those whose credit is shaky.

  25. jrdnjstn78 says:

    Debit cards aren’t as bad as some people think. If they have the Visa or Mastercard logo then you get the same protection as with any credit card but you have to sign for your purchase. If you use your pin number for your purchases then your transaction is a debit and you don’t get the same protection as if you would have signed for it.

    Some people maybe trying to fix their credit and can only get a debit/credit card and can not get an actual credit card. If you need to rent a vehicle you have to have a credit card and for someone who only has a debit/credit card then this is where it’s good for them.

  26. DeeJayQueue says:

    @jrdnjstn78: You can’t use debit cards for car rentals or anything where they require a credit card as a form of collateral. They specifically look to see if it’s a bank card, since they have to put a $400 hold on it. I’ve tried to rent a car on a debit card before and it didn’t work because I didn’t have an actual credit card. Some places will let you bring in a utility bill but some will not, YMMV.

  27. Buran says:

    @SadSam: “If you’ve got a Visa branded debit card you’ve got the same protection as you would with a Visa branded credit card.”

    Nope. Federal law means you’re not liable for more than $50 of fraudulent charges on credit cards. That law doesn’t cover debit cards. The “protection” on debit cards is just bank policy — which, as we all know by now, banks can ignore when they feel like it. Not so federal law.

  28. RhymePhile says:

    So can anyone give us a clear answer here? I use my debit card as a credit card because otherwise the bank charges a fee. I sign for everything I buy, and I track my purchases online as often as I can remember while I’m in work. My credit card is used for online stuff or larger purchases. I like having the debit card because I know it’s coming right out of my checking account.

    Is there really a way to be completely safe? I don’t relish the thought of carrying $100 cash on me when I need to go grocery shopping.

  29. SadSam says:

    I’ve used my Visa branded debit card to rent cars and I’ve never had any problem doing so. I also have never experienced a ‘hold’ on my funds when renting a car.

  30. Mr. Gunn says:

    What is it with “personal finance columnists” doing financially-ignorant things? Can I get one of those jobs?

  31. vesuvian says:

    Just had my vision of Walt Mossberg with three pairs of Manolo Blahniks, size 14.

    The worst part of having a debit card – and having an attack on it and fraud committed with it – is the length of time one’s bank takes to replace it. My bank, the second-largest national bank, took two weeks to re-issue my Visa debit card after Euro 200 was withdrawn from an ATM in Antwerp.

    The culture of plastic, and the corresponding loss of contact with something tangible like folding money (and the labor it represents), is drawing us further away from more intimate connections with vendors at farmers’ markets in favor of deliveries of supplies in trucks. A paper-based transaction generally includes a smile, possibly small talk, and an item for a bag. A debit purchase is little more than a line item in the Quicken register.

  32. KarmaChameleon says:

    @gingerCE: “Hence, the debit card, which really helps those who have yet to establish credit or those whose credit is shaky.”

    That’s the problem, it doesn’t help you. You’re not building a credit history with a debit card. You’re basically running in place. Not to mention that regardless of some of the bad info on this thread, debit cards are not subject to a lot of the protections required by law for credit cards, despite the presence of a Visa or MasterCard logo. Corporate policy != federal law.

    My debit card sits in a drawer, all my bills and everyday expenses are paid with my credit card which gets paid off at the end of the month. Rewards checks roll in, which go into a high-yield savings account. All the while, I’m building a positive credit history.

  33. coren says:

    I can honestly not see debit cards reducing spending unless you have a card that A) won’t allow you to overdraw (and has no fee attached if you try) and B) has a very small amount to draw from that you add to as necessary. It’s not like cash where when you’ve spent what you have, no more. It’s like a credit card, where it’s pulling from some account you can’t see at the time. You don’t really feel the loss of it like you do cash, and you can lose track of or forget purchases easier.

    That’s not to say debit cards are bad, but trying to pass them off as a money saver is a joke.

  34. dcartist says:

    Overdraft “protection” racket…

    debit cards are a way for the BANK to rob you blind…

    any extra robbery by individuals not associated with the bank, are purely hit & miss.