Major incidences of card fraud always cause a stir in the news, but is it also affecting how and when you pull out your debit card?
While many of the news articles that report on card fraud include information and reminders on how to protect your debit cards, credit cards and bank accounts, recent research suggests they can also influence how and when you use your cards.
The study, commissioned by the Netherlands Bank (DNB), looked at newspaper reports of card scams and fraud over a three-year period (2005-2008) and tracked the debit card usage of volunteers.
It found that debit card use would decline on the same day articles about fraud were published.
“The total number of card payments is 0.8% lower on days when fraud articles are published than what it would be without these articles,” the report said.
“Interestingly…the effect only lasts for one day with consumers reverting back to their normal payment behaviour almost immediately.”
But as reports on card fraud increased over the years of the study, the data recorded showed that the impact of news coverage could become compounded, generally leading to more significant declines in debit card use.
“Overall, consumers reaction seems to grow stronger the more frequently articles are published,” the report surmised.
“Whereas media attention before mid 2007 had no single effect on debit card usage, it did depress total debit card payments [by] 2.8% in the second half of 2007, when newspapers were full of skimming fraud articles and when the focus of the articles had started to shift from ATM fraud to POS [point of sale] fraud as well.”
While this report relates specifically to the Netherlands and uses data several years old, the length of the study and the compounded effect discovered over time suggests that media coverage of card fraud will have some impact on people who use debit cards and read the news. Even if they are in other countries.
Another implication drawn from this study is that media coverage makes us more aware of the risks of paying with a card. So you could become anxious about the security of your card when you do use it even if you do not consciously or unconsciously change your debit card habits.
Debit Card Fraud in Australia
Both debit and credit card fraud in Australia have increased over the last few years, as online and mobile shopping has become more and more popular.
The Crime Commission’s Crime Profile Series release on card fraud noted that debit card fraud in particular has risen considerably since 2009.
“This may be due to an increase in skimming attacks focused more on debit rather than credit cards,” the Crime Commission explained.
“Unlike credit card fraudsters who usually charge merchandise and then resell it to generate revenue, criminals who create counterfeit ATM or debit cards by stealing account data can withdraw cash directly from bank accounts.”
The Crime Commission also notes that there can be a significant psychological impact for victims of card fraud. And as it becomes more common that can branch out to affect other family members and close friends, potentially leading to more concern when using your debit card in certain situations.
But as debit card fraud has increased, so too has the security on your cards. Banks, card processors like MasterCard and Visa and organisations like the Australian Bankers Association, SCAMwatch and the Crime Commission have all increased their efforts to understand current debit card threats, protect cardholders and catch criminals before too much damage is done.
The recent bout of reports in the media of fraud ring busts is proof that people are not sitting idle while credit card and debit card fraud increases.
In addition to tracking criminal activity and offering cardholders protection, the authorities and banks have developed a range of informative resources so that you can learn more about the risks of debit card fraud and how it occurs.
This sort of information helps you identify potential risks and suspicious activity, putting the control back into your hands.
There are many ways for debit card fraud to occur and it seems that scammers ar pulling out all the stops these days but, by the same token, there also appear to be more news reports of scams that have been busted.
That means that while it is still good to be aware of the risks of debit card fraud, it does not have to affect how or when you use your card. Because even in the worst case scenario, you will have the support of your bank and a zero liability policy to help make sure you get your money and keep your account secure.