Del.icio.us
Digg
Reddit
Facebook
StumbleUpon
In recent weeks, consumers from Seattle to Florida have complained that someone has debited their bank accounts -- without the use of their actual debit card. It's called "PIN block" fraud, and it's the latest method of separating you from your cash.
Here's how it works: Criminals hack into a retailer system, steal the PIN blocks (the encrypted PIN data) and the terminal code that is used to encrypt the PINs. They also steal the magnetic stripe data on the back of the card. With this information, the crooks make up counterfeit cards and they're off to the ATM machine.
Retailers should destroy PIN information after a transaction, but many store it on the same network that encrypts the PIN. This makes it particularly easy for the criminals to capture the PINs and create counterfeit cards.
Banks are not required by federal banking regulations to offer the same consumer protections on debit-card theft as they do on credit-card theft. With credit cards, the consumer is liable for up to $50 if the transaction is deemed to be fraudulent. With debit cards, the consumer may be liable for the entire amount, although some banks are honoring the same protection as with credit cards.
RD's advice: Avoid using your PIN. Instead opt to use your debit card as a credit card, which requires your signature. This will limit the number of retailers who have your PIN information in their computer systems. And check your bank statements regularly. Some banks will credit a person's account only if a suspected case of fraud is brought to their attention in a timely manner.
Advertisement 
Your Comments
See all
...