Fake Texts, Pop-Ups, and Downloads

Cyber-fraud thieves continue to bombard consumers with fraudulent contacts via text messaging, computer pop-up messages, and software apps that appear to originate from legitimate businesses or government sources. Consumers are being tricked into providing valuable personal information over their computer, phone, or fax that can result in funds being drained from their accounts.

Smart phones in particular are being targeted because scammers know that most users have their phones with them and tend to read and respond more quickly to text messages, calls, and emails. Beware of any contact that focuses on the "urgent" nature of a response. Creating fear and panic is one of the goals of cyber-thieves as they want people to react differently than they normally would under calm circumstances. Fake messages and fake web sites are also harder to detect on the smaller screen of a smartphone. The key is to never provide any personal information or click on any link in response to one of these "urgent" messages. Only communicate with your financial institution using phone numbers or email addresses that you are certain about.

Unexpected pop-up windows on web sites can often be an attempt to either infect your device with spyware or obtain personal information. It is normal for the credit union to request a login ID and password when you sign in to either home banking or mobile banking. It is also normal for challenge questions to be asked if you are signing in from a new computer or location. It is NOT normal however for a financial institution to ever ask you - through a pop-up window - to type your name and information such as account number, date of birth, PIN numbers, and other personal information.

Consumers should be very suspicious of unsolicited offers to download free games, programs, and other apps. These great "deals" could contain malicious software to direct you to fake web sites or install spyware used to steal information that can lead to loss of funds. Anyone surfing the Internet from their phone or computer device should always have an updated anti-virus service to protect against fraud. Consumers should only install programs and apps from legitimate web sites, such as your Internet service provider, financial institution, wireless phone company, or trusted app providers.

Mobile technology is a wonderful resource for consumers but it also provides a growing opportunity for cyber-criminals to generate new methods of committing fraud.

Recent TV News Story on Debit Cards

Earlier this week one of the local television stations ran a story on identity theft involving card fraud with debit cards and credit cards. The implication from the news story was that use of debit cards was not advisable because of the increased fraud liability expense to consumers for fraudulent transactions. It was recommended that credit cards be used for purchases rather than debit cards because of the reduced liability and the fact that card fraud thieves would be using the financial institutions' money rather than the consumer's personal account.

There are a few other considerations here. First off, North Alabama Educators Credit Union does not charge any liability expense to our members for unauthorized debit card transactions due to fraud. Many other credit unions follow this same policy. The law may provide the ability to charge a $50 liability expense for debit card fraud but very few financial institutions actually do this. Another concern in using a credit card for everyday transactions is actually paying off that credit card in the same manner that your would for debit card purchases. Consumer debt remains a big problem, especially credit card debt, so it does require good money management skills to keep credit card balances low or paid off to avoid the debt trap. Steering consumers to use credit cards for all transactions could produce some financial pitfalls if not managed properly by the consumer. Spending what you know you have can prevent unwanted debt.

There was also concern cited in the news story about thieves obtaining PIN numbers when using debit cards. Consumers don't have to enter their PIN number for all transactions when using their debit card. To enhance security of card PIN's consumers can always choose the "CREDIT" option at merchant Point-of-Sale terminals and sign for transactions when using their debit cards. The transaction amount would still be deducted from the checking account.

On a personal note, my own debit card number was compromised and used fraudulently this past fall following a data breach by a major national restaurant chain. A considerable number of consumers in this area had fraudulent transactions because of this breach. None of our members who were affected were responsible for any costs associated with fraud on their accounts. The stolen funds were returned to the affected accounts usually within the same business day.

Consumers are certainly free to choose how they wish to use debit and credit cards. The recent news story however did not paint the full picture of how debit card fraud is actually handled by financial institutions. It also did not address the possible pitfalls of only using credit cards for purchase transactions. The bankruptcy courts are full of consumers who had good intentions of paying back their credit card debt but were unable to for a variety of reasons.