June 4, 2010 Each year, the Credit Union experiences thousands of dollars in fraud losses due to retailers and processors whose systems are hacked into by criminals who create duplicate debit cards. We have implemented a method to help reduce these losses, but it’s crucial that we get this information to our debit card users.
When a hacker creates a duplicate card, the PIN (Personal Identification Number) tied to the card, is difficult to reproduce. Because the PIN can be difficult to reproduce, the thieves will frequent stores that sell gift cards and use the signature method to purchase the gift cards. They then sell the gift cards and this is how they usually make their money.
We can now block our debit cards from being able to use the signature method at various merchants. The signature method is when you sign for a transaction rather than using your PIN to process the transaction. Blocking the signature method of using our debit cards means that the hackers cannot use the cards.
Because we have several thousand debit cards in the wallets of our members, it’s impossible for us to call each member to inform them that the signature method is temporarily blocked due to our attempts to prevent fraud. So it’s crucial that members with debit cards understand the ways in which their debit card can be used.
When you sign for your transactions, you preserve any chargeback rights for the transaction. Chargeback rights give the Credit Union the opportunity to try to resolve issues for our members if you have been unsuccessful obtaining a refund from a merchant. When you use your PIN for your transactions, you have no chargeback rights. This is why many stores prompt you for a PIN first when you swipe your debit card.
We highly recommend that you always tell the store clerk that you want to process your transaction as a “Credit.” This preserves your chargeback rights. Signing for your transactions also generates income for the Credit Union, which helps us to keep the costs of our debit card program down so we can avoid charging excessive fees to members for debit card use.
In the future, when we have a breach due to a lack of security at a retailer or processor, we may block the ability to sign for your transactions using your debit card at certain merchants. The types of merchants we will block generally include grocery stores, pharmacies, home supply stores and wholesale clubs. When we do initiate this block of signature transactions, you can still use your PIN at the Point-of-Sale and at ATMs.
We will place an announcement on the home page of our web site www.centralmainecu.com whenever we implement this block.
You should also be aware that your crad is limited to 3 ATM transactions and 10 Point-of-Sale (POS) transactions in each 24 hour time period. The 24 hour time period runs from 4:00 P.M. to 4:00 P.M.
Signature transactions generate a ‘hold’ in your account until the merchant comes to debit your account. This substantially reduces the odds that you will inadvertently use the money between the time of the transaction and the time your account is debited. The ‘hold’ generally falls off after three days or when the merchant debits your account, whichever comes first. These ‘holds’ significantly reduce the amount of overdraft and NSF fees members are assessed.
This is your Credit Union, so we ask you to help your Credit Union by doing the following. Whenever possible, sign for your transactions. It protects you and generates revenue for the Credit Union. If you try to sign for a transaction and it’s rejected, then use your PIN. Remember, when we block the signature function, you can still use the PIN function. If you try a signature transaction and the store clerk tells you it’s denied and you know there’s money in your account, then try the transaction again using your PIN. If you don’t have a PIN or don’t remember it, call Katrina or Christine in Card Services and you can choose your own PIN.
REMEMBER: ALWAYS SIGN FOR YOUR DEBIT CARD TRANSACTIONS.
IF YOUR TRANSACTION IS DENIED, TRY USING YOUR PIN.
If you have any questions, please contact Katrina or Christine in our Card Services Department. And thank you for helping us to avoid fraud.
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