Where NOT to use a Debit Card (bankrate.com)

4 risky places to swipe your debit card
By Claes Bell • Bankrate.com


Would you give a thief direct access to your checking account?

No? Unfortunately, you may be doing just that by regularly using your debit card. Debit cards may look identical to credit cards, but there's one key difference. With credit cards, users who spot fraudulent charges on their bill can simply decline the charges and not pay the bill. On the other hand, debit cards draw money directly from your checking account, rather than from an intermediary such as a credit card company.

Because of that, even clear-cut cases of fraud where victims are protected from liability by consumer protection laws can cause significant hardship, says Frank Abagnale, a secure-document consultant in Washington, D.C.

He cites the example of the The TJX Companies Inc.'s T.J. Maxx data breach that exposed the payment information of thousands of customers in 2007. The incident resulted in $150 million in fraud losses, and much of it was pulled directly from customers' bank accounts. While credit card users got their accounts straightened out and new cards in the mail within a few days, the case created major problems for debit card holders who waited an average of two to three months to get reimbursed, Abagnale says.

While debit card fraud is always a possibility, being careful where you use it can help keep your checking account balance out of the hands of criminals.

SKIMMING ATMS

The idea that outdoor ATMs are among the most dangerous places to use a debit card seems a little bit absurd. But some ATMs present a perfect opportunity for thieves to skim users' debit cards, says Chris McGoey, a security consultant based in Los Angeles.

Skimming is the practice of capturing a bank customer's card information by running it through a machine that reads the card's magnetic strip. Those machines are often placed over the real card slots at ATMs and other card terminals.

"Any transaction you do outdoors at an open ATM is going to be higher risk exposure," McGoey says. "If the public has access to it, then someone has the ability to add skimming devices to it, position cameras on it and position themselves in a way where they could surveil it."

He says you're better off using an ATM inside a retail outlet or other high-trafficked, well-lit place.

Julie McNelley, senior analyst for Aite Group LLC, a Boston-based financial services research firm, says even the card terminals that card users must swipe to get into ATM vestibules are being used as a skimming site by criminals. You can spot ATM skimmers by checking for ATM components that look beat-up or askew, she says.


GAS STATIONS


Gas stations are another danger zone for debit card use.

"You go to a gas station and you stick your debit card in there, and you swipe it through a machine," Abagnale says. "I'm sitting across the street with a laptop and an antenna. I put a skimmer in there, and I'm picking up all the information. Before you even get home, I've debited your account."

Gas station payment terminals have many of the characteristics card fraudsters love, McNelley says.

"In a gas station where you do have a whole bunch of pay-at-the-pump kinds of things and minimal supervision, it's pretty easy for a bad guy to put a skimming device on and put a little pinpoint camera there and compromise debit cards that way," McNelley says. Thieves often use small cameras to capture footage of debit card users entering their PINs so they can have free access to their money.

She says even if the thief doesn't manage to get your debit card personal identification number, or PIN, from such a device, he still may be able to duplicate the card's magnetic strip and use it for "sign and swipe" Visa or MasterCard transactions.

With the high potential for fraud in pay-at-the-pump debit transactions, it might make sense to use an alternative such as cash or credit cards the next time you fill up.

ON THE WEB



Debit cards are a convenient way to buy products online, especially for those who don't like to use credit cards. Unfortunately, the Web is one of the most dangerous places to make purchases, McNelley says.

"Online is the No. 1 place where consumers should not use their debit cards," she says. "It's susceptible at so many points. The consumer could have malware on their computer, so it could be at their endpoint that the data get compromised. It could be a man-in-the-middle attack where somebody is eavesdropping on their communications via the wireless network. And then at the other end, that data goes into a database at the merchant. As we've seen with some of the higher-profile breach events over the last year or so, that data is going to be vulnerable if (they're) not properly cared for."

Aside from the potential for hacking at many different points in a transaction, Abagnale says a fundamental problem with using debit cards online is it's impossible to know who is handling your information.

"Buying stuff online, you have to be careful because you have to know who you're doing business with. When you buy things online, what always kills me about that is people say, 'This is a safe site,'" Abagnale says. "Who works there?"

RESTAURANTS


"Would you care for a side of debit card fraud with that?"

Restaurant servers don't ask that question, but they might as well with the standard practice of taking customers' debit cards to run them behind closed doors.

"Any place where the card is out of hand" can increase the chances of fraud, says McGoey. "The guy comes to your table, takes your card and disappears for a while, so he or she has privacy," giving the person the opportunity to copy your card information.

Even restaurants without sit-down service can present a threat. McNelley says using debit cards to order delivery can be risky because cashiers tend to keep customer payment information on file. That may make future orders more convenient, but small businesses rarely take the steps necessary to safeguard payment information, she says.

Overall, she says, regardless of whether you use your debit card at a small restaurant or a big-box store, the possibility of fraud is always there. She cites the example of Michaels Stores Inc., which saw its customers' debit card information stolen in May by debit card terminals doctored by thieves.

"Even if you do exercise caution … there are still the Michaels-type incidents that will happen," McNelley says.

How to Get Cheaper Cable TV (Wall St Journal)

Customers Say to Cable Firms, 'Let's Make a Deal'

By LAUREN A. E. SCHUKER
Want cheaper cable television? Try asking for it.

Every three to six months, when his most recent promotional deal expires, Carey Anthony blocks out an hour of his day to negotiate with his cable company. Each time, the president of a software company in Los Angeles says he can knock $20 to $30 off his monthly bill.

Lauren Schuker on The News Hub has some tips on how to trim your cable bill, such as asking your service provider for unadvertised deals.

"Negotiating works every time," says Mr. Anthony, 46, who estimates he has saved more than $350 a year over the past decade. "Sometimes you have to threaten to cancel service, or switch to another provider, or sit on hold for an hour, but I've never failed to get a discount," he says. "You just have to be diligent."

As prices for cable services have surged over the past 10 years and the faltering economy has pressured household incomes, a growing number of cable customers face skyrocketing bills.

Today, the average cable TV subscriber pays about $128 a month in fees for all services, including TV, Internet and phone—nearly three times the $48 they paid each month in 2001, according to estimates by research firm SNL Kagan.

The increase is largely the result of sharply rising costs of programming, particularly sports. The TV networks pass those additional costs onto the operators, which in turn pass them onto consumers.

Cable-company executives have said publicly that they're worried rising costs could drive consumers away. The largest U.S. cable company, Comcast Corp., lost 442,000 video subscribers in the first nine months of this year, though this was fewer than in the same period last year. No. 2 Time Warner Cable Inc. lost 319,000 over the same period.

.Telecommunications companies including Verizon Communications Inc. and AT&T Inc. are now offering more competitive services. And a growing number of early adapters are severing ties to cable altogether to rely on broadcast TV and Internet distributors, such as Netflix Inc. and Amazon.com Inc., though getting live sports can be difficult for these so-called cord cutters. Even in rural areas, where customers often have only one cable TV option, competition from satellite service is increasing, though satellite providers are facing similar cost pressures and passing on higher bills.

To stanch the bleeding, some cable companies have begun to quietly offer stripped-down plans to retain viewers. They frequently go unadvertised in many regions and customers might have to hunt for them on providers' websites to find out exactly what to ask for.

Comcast, for example, has a "digital economy" tier that sells for between $29.99 and $39.99, depending on the area. The next tier up in service Comcast offers, which includes ESPN, often sells for around $58 a month.

The digital economy tier includes local broadcast channels, as well as popular cable channels, such as USA, Lifetime, but no ESPN. The company says it will work with customers to find a package to fit their needs.

Time Warner Cable late last year introduced a "TV Essentials" package in the same vein. It can cost as much as $49.99 but the company also offers promotional rates as low as $29.99 a month. It includes broadcast channels as well as 38 additional channels, but not ESPN.

Fans of premium channels and their shows, such as HBO's 'Game of Thrones,' can add them to the most basic cable service.
."TV Essentials is geared towards a segment of our customers who are having trouble affording the larger packages, even though they want [them]," a spokeswoman for Time Warner Cable says, adding most people who call about it end up taking a "more robust" package.

Some cable operators and DirecTV also offer a family packages, which usually cost $30 to $40, and give households all the broadcast channels as well limited cable channels such as the Disney Channel and Food Network.

Other subscribers are dumping bulky packages of 190 channels or more in favor of the most basic service—often known as the "Lifeline" tier in the industry. These usually include public broadcast stations and the handful of over-the-air channels, and usually cost $13 to $16, compared to the $40 to $60 it usually costs to get the more widely-distributed level of digital cable service, which includes ESPN, MTV, TNT and other basic cable channels.

Although cable operators don't widely market it, a federal law requires them to allow consumers to tack on premium channels such as HBO or Showtime for roughly $17 a month, even if they only have the most basic cable package.

Some consumers say they can finagle long-term extensions of special promotional rates used to attract new subscribers that normally expire after a year or two.

Getting Down to Basics
Negotiate. Many providers offer less-expensive packages with fewer channels but don't advertise them widely. Providers often will allow customers to continue cost-saving promotions well after they expire. Other providers will cut you a new deal every six months—but you have to call and ask. Often, if customers threaten to cancel service, they are transferred to the "retention department" staffed with representatives who are trained to offer customers deals to stay put.

Don't be beholden to the bundle. Service representatives are trained to push various bundled services (cable, Internet, telephone) because it's more profitable for the company. Some customers don't need a landline and can save a lot by avoiding that service. If you are offered a promotion or discount, suggest how it could be modified to meet your needs and make the company a counter-offer.

Go basic. If you love premium channels, you can still get HBO, Showtime and others with the most basic, broadcast-channels-only service—and knock your bill down to less than $50 a month. Just ask to add those channels onto the most basic offering.

Give up the DVR. Digital video recorders can increase bills by as much as $20 to $30 in some cases. When companies introduced the DVR in the early 2000s, charges were roughly $8 to $9 in addition to the cable box. Now they often cost as much as an additional $12.

Keep tabs on promotions. Place reminders on your calendar for when a special offer expires so you can negotiate a new deal before the promotion ends and you end up paying full price.

Russell Bailyn, a 29-year-old wealth manager in New York City, says he has threatened to switch service in order to keep the new-subscriber promotional rate for television, broadband, and telephone service, even though he originally signed up for Time Warner Cable back in 2004.

Mr. Bailyn says he keeps meticulous notes of his conversations, but it isn't always an easy negotiation. "Time Warner has people trained to deal with people like me," he adds. "They won't just give into an angry, articulate New Yorker easily."

A spokesman from Time Warner Cable declined to comment on customer negotiations and extending promotional pricing.

Other subscribers say they bend the truth to score promotional rates years after signing up by cancelling service and asking someone else in the household—a spouse, grandparent, or older child—sign up for service at the cheaper, "new customer" rate.

Switching to a bundled TV, phone and Internet package can work, if you really need all three services.

Mark Nitzberg, who lives with his wife and two kids in Westmont, N.J., says he now saves about $70 a month as a result of switching his family from Comcast TV and Internet service and Verizon phone service to bundling everything together with Verizon's FIOS service earlier this year.

They used the extra money to buy a new flat-screen TV and upgrade the living room couch to a new sectional sofa. "After seeing how much we're saving, our friends constantly ask how we got the $79.99 deal," he says.

Write to Lauren A. E. Schuker at lauren.schuker@wsj.com

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