Friday, March 10, 2006

Debit card and ATM card theft

This article, at the end, finally supports a claim I've made for years now, but according to them, it's worse than I have been saying.

My rules of thumb are:
1. it's OK to use credit cards online, because the credit card companies (and regulations) limit your loss.
2. it's not wise to use debit cards (e.g., branded like a credit card) because even if you can get your money back, you're out that money while you're trying to get it back. That article suggests that you're not always able to get your money back. I refuse to carry a branded debit card for this reason.
3. I had assumed it was OK to use ATM cards at a merchant because I assumed the box encrypted the PIN with a key known only to that one hardware box and the bank. I guess I assumed too much. The article suggests that folks are sloppy with their key management - using one key for many boxes and even letting network components know the PIN encryption key. I guess I will have to stop using ATM cards except at the bank's own ATM. That's too bad. I liked paying for things at the supermarket with my ATM card.
4. I refuse to use EFT, except for direct paycheck deposit. Once anyone is able to move money in or out of my bank account, they can drain it and I get no recourse at all.

I did use EFT once, getting money from Europe, but for that purpose I opened a special bank account with almost no money in it - received my EFT payment - moved it manually to my real account - and then closed the fake account.


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