Guard Your Debit Card and PIN

Since companies have increased their network security following breaches of debit card and other credit information data thieves have shifted their focus to "that moment in time debit card data remains unprotected in a public setting — during the swipe and PIN-entry process."

From USA Today article: Data thieves target debit cards, PINs at point of sale:

Debit card account numbers and PINs are highly sought because they can be converted quickly into cash. A device called a mag stripe encoder can be purchased legally on the Internet. For about $200, anyone can embed a stolen payment card number onto a blank magnetic striped card. With the associated PIN, free cash is only an ATM away. . . .

Cynthia Larose (who chairs the privacy and security practice at the 500-attorney firm, Mintz LevinLarose) says:

"Debit card users should be mindful of the heightened risks,  Financial institutions generally will act quickly to make a victim whole in cases of fraud involving use of a credit card or an ATM machine. However, banks are not obligated to work with a victim in fraud cases involving use of a debit card at a POS terminal.

"Other than avoiding the use of debit cards at POS terminals, there probably is little a consumer can do," 

A final piece of advice: "Use cash."

From USA Today article: Why you should use your debit card sparingly:

Excerpts from USA Today interview with Jeff Hall, who directs the information-security practice at tax and risk consultancy McGladrey:

Criminals are scouting vulnerable venues. . . . All electronic devices today run some sort of operating system. As such, they can all be misused if the right person can insert themselves into the process at the right point.

Debit cards are tied directly to someone's bank account. As a result, there is typically a high likelihood of tapping into a large amount of cash quickly. Mag stripe data is fairly easy to come by. If you have complete mag stripe data with a PIN, you can completely impersonate the real card.

Consumers should use credit cards and stop using debit cards. However, that means consumers will need to be diligent in paying off the balance of their cards every month. Debit cards are risky because the government has not put the same loss restrictions on them that they have for credit cards. Consumer groups have been lobbying for these types of restrictions for the last few years, but that is likely to come to an end in the next year or two as state governments and/or the federal government respond.