Paper or plastic....or theft?

While doing some research, I came across this article from the Privacy Rights Clearinghouse and needed to share it. With the emphasis placed on Internet privacy and protection, it is also important to remember to protect yourself from privacy threats in your everyday life.

This article discusses the uses of credit card vs debit card (and also touches on other areas like store cards, and gift cards, etc). Basically...don't use or have a debit or checking card. The article gives greater details as to why you should use credit over debit. Some of the main points include:

• Debit cards do not offer the same quality of protection against fraudulent use that credit cards do. Debit card fraud must be reported within 2 days, and even then banks can wait up to 2 weeks before refunding your stolen money--which means missed bills and possibly an overdrawn account.
• Credit cards allow you to stop payment or dispute a charge, while debit cards are drawn directly from your checking account and the transaction is relatively quick.
• Debit cards may or may not require the user to know a PIN code, they can use a signature instead. This is important for two reasons:

1. Someone who steals or find a lost debit card can use it at will without having to know the PIN.
2. When signing for an item instead of entering a PIN, it takes the same processing route as a credit card, meaning your transaction will not show up right away in your account.

As far as making online purchases, those should all be done with a credit card, basically for the same reasons listed above. Sites can be hacked, or set up entirely with malicious intent to steal information from the user. Again, it is easier to deal with fraudulent use of a credit card opposed to a debit card. The article references using an ATM only card to access your checking account, which is different than a debit card because you can not use it at retail outlets and must always enter your PIN.

The article also includes the following "Tips for Limiting Your Loss:"

1. Protect your cards, account numbers, and PINs. Keep your cards safe and be sure to sign the back of the card as soon it arrives. Take home your receipts (which may have your account numbers printed on them) and shred them instead of leaving them in the store’s trash. Memorize your PIN; don’t write it on your card or write it on a note in your purse or wallet. And always position your body so that no one can see the keypad at the ATM or checkout counter when you punch in your number.
   
   
2. Timely reporting is a must. To limit your credit card loss to $50, you must report unauthorized charges within 60 days. For debit, ATM and other electronic transfers, you only have two days to minimize your loss.
   
   
3. Monitor your credit card charges and bank accounts frequently. Online access is an easy way to monitor even daily activity.
   
   
4. For online purchases use credit cards rather than providing your debit card, especially when dealing with an unfamiliar site.
   
   
5. Checks should be written only to those you know and trust. Remember, your check includes your bank routing number and account number. This is all a thief may need to access your bank account.
   
   
6. Suspect payments, especially money orders, you receive from an unknown source. For tips on how to spot a phony money order, see the US Postal Service, September 2005, fraud alert: www.usps.com/postalinspectors/fakemo.htm.
   
   
7. Caution is advised when depositing money orders, checks, cashier’s checks or other payments you receive from an unknown source. Deposits you make may not have cleared, even if your bank balance shows the funds have been added.
   
   
8. Beware of suspicious-looking ATMs and checkout-lane card readers. Unbranded ATM machines in convenience stores and the like can be scams. Also, some recent high-profile thefts have involved the practice of “skimming,” in which account data from cards’ magnetic stripes were secretly copied from checkout-lane card readers and later used to create counterfeit cards.

Privacy threats can come from any source so being vigilant of what is going on with your accounts is important. Using proxy servers and other tools while using the Internet doesn't mean you are protected from other sources of fraud and criminal activity.