Saturday, March 15, 2014

Debit cards offer on-off switch to hinder fraudulent withdrawals

The New York Times has an informative article by Ron Lieber Saturday in his “Your Money” column, “Consumers not powerless in the face of credit card fraud,” Business Day section, link here. 

Actually most of the article concerns debit cards.  The most innovative strategy is an on-off switch where a smart phone app turn off the card except in a narrow time window when it is to be used.  Another is to maintain two checking accounts, so that another account for recurring payments cannot be drained; but that might need to be at a different institution because hackers could still get to it.  Another (for credit cards) is to use a mechanism that tells you when you are close to a credit limit. 

In my own experience last year, companies were very diligent about email notification when there was fraudulent use of stolen cards.