Nickel recently wrote about the safest banks. Data he found showed that — in general — accounts at larger banks were more prone to be targets of fraud. As my family knows from experience, however, fraud can hit account holders at even the smallest community banks.
My parents, my brother, and I all use the same local credit union as our primary bank. The perks are good — totally free checking, reimbursed ATM fees, and access to credit union interest rates on loans. No matter how small, however, no bank is immune from fraud.
My parents were first to find this out last year, when two ATM withdrawals for several hundreds of dollars each — made in London — appeared on their account. That one was pretty easy to dispute. (My parents were firmly on the other side of the Atlantic at the time).
Recently, my brother had a similar experience. He was scratching his head at an ATM one night, trying to figure why his balance was lower than he expected. When he got home and checked his account online, he noticed a $500 debit card purchase he never made — to some company in Pennsylvania with a dubious website.
He’s currently trying to sort that one out with the credit union.
In my parents’ case, the leak was traced back to Office Depot’s failure to improperly secure both credit card numbers and PIN numbers. Shame! Where my brother’s information got lose, who knows.
I used to use my debit card for everything — gas, restaurants, groceries, you name it. I’ve since stopped, and now pay with a credit card that I pay in full each month. I know that banks will put money fraudulently taken from your debit card back in a matter of a few days, but there’s just something I don’t like about the prospect of scammers getting a hold of my cash — I’d prefer it be a credit card bank’s money.
Plus, if a fraudulent transaction on your debit card drains your bank account — you may be liable for any overdraft fees and — if not having funds for a few days causes you to miss a bill due date — you will be dinged with more late fees and interest penalties. That’s a risk I don’t want to take.
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