Nov 18, 2024
While running errands in New York last year, Grant Holihan of Long Island received a call from Chase Bank asking him to confirm a recent purchase in Las Vegas. But Holihan, 27, claimed to have never been to Las Vegas. He suspected his debit account and PIN were skimmed at an ATM near his construction job site.
According to Holihan, Chase agreed to close the account — but then more charges followed. In just under an hour, more than $7,000 was drained from his bank account in separate transactions on the other side of the country. Ultimately, his entire life savings was stolen in less than a day.
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Now, Holihan says Chase is still refusing to refund his money.
“I’ve never given my PIN out," Holihan told CBS New York. “They still deny my claim, and it's been over a year later, and I still haven't seen my money."
With no resolution in sight, it’s important to understand how this was able to happen and what can be done to avoid a similar financial loss.
How does debit skimming work?
In debit card skimming, fraudsters secretly install devices on ATMs or payment terminals to steal card details and PIN information. The skimmers capture data while a hidden camera or keypad overlay records the user’s PIN. In most cases, these devices are difficult for people to see because they look like legitimate card readers.
Holihan suspects that is exactly what happened to him.
"This customer's claim was denied because the charges were authorized with their PIN and verified via phone call," JPMorganChase told CBS News New York.
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Unlike credit card skimming, where thieves steal credit card numbers, debit card fraud doesn't fall under the Truth in Lending Act, which offers more consumer protections. While speaking with CBS reporter Elle McLogan, National Consumer Law Center senior attorney Carla Sanchez-Adams shared how that impacts consumers.
"The law that applies to credit cards, the Truth in Lending Act, is more protective than the Electronic Funds Transfer Act,” she told CBS New York. “I always caution and advise consumers who have the ability to have credit cards to use those to make payments because they are much safer than any other type of payment."
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How to protect yourself from debit card skimming
You can protect yourself from skimming by using a credit card over a debit card whenever possible, as they offer more recourse if fraud occurs. However, not everyone has access to a credit card. If you need to use a debit card, you may want to tap rather than insert your card. The FBI notes that tap-to-pay transactions are “more secure and less likely to be compromised.”
Be vigilant at ATMs and payment terminals. If the terminal has clearly been damaged, or if anything is loose or misaligned, it’s best to steer clear. You can also grasp the keypad and pull before entering your PIN to check for a keypad overlay. If it gives or comes off, it may be a skimmer. But if you're at all unsure about the terminal, don't use it.
You may want to stick to ATMs that are inside banks or in well-lit, highly trafficked areas. The location may make it harder for fraudsters to install a skimmer.
Finally, monitor your accounts regularly so you can quickly report unauthorized transactions. If your bank offers real-time alerts for purchases or withdrawals, you can enable that feature. If you suspect your card has been skimmed, report it immediately. Staying alert and taking these precautions can help reduce your risk of falling victim to skimming.
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Danielle is a personal finance writer whose work has appeared in publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love. She’s especially passionate about helping families and kids learn smart money habits early.
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