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They’re easy, convenient, and if you watch your balance, using a debit card instead of credit is a good way to manage your money.

“I can control my money that way,” Chris McIntyre says. “I know what I can spend and what I can’t spend.

The Problem

But at what price? The next time you swipe your debit card you may be handing over your bank account information to a thief. Scam artists swindled debit card users out of one billion dollars last year. And unlike credit card fraud, where you can dispute charges before money is ever taken from your account, that’s not the case when your debit card is involved. It happened to Jonathan Vasiladis.

“There were charges for over $4,000 from Las Vega and London. Clothing, electronics all kind of stuff. Charges ranged from $25 to $800,” Vasiladis said.

“You won’t catch me alive or dead using a debit card,” security expert Robert Siciliano told me. He says the risks are just too great and debit card protections are too small.

How Thieves Do It?

The latest weapon of choice for debit card scammers are skimmers, put on atm machines or at other places you use your credit or debit card.

“When you come through and slide your card, it skims the information off the back of the magnetic strip,” Siciliano says.

Recent surveillance video captured a thief in Daytona Beach Florida installing a skimming machine at a Bank of America ATM machine. He even put an out of order sign on the bank’s other ATM. For 7 hours customers unknowingly swiped their card and a camera the bad guys installed captured each customers’ pin number.

“From there the bad guy will take the ATM skimmer off the face of the atm and download the data,” according to Siciliano.

In some cases, crooks can access the information wirelessly. Then, using a machine they can simply buy online, and your information, the crooks create a new card they can use to either empty your bank account at an atm, or to begin shopping.

And if you have your checking account setup for overdraft protection, or linked to another account, they can steal even more.

And thieves aren’t just targeting ATM machines. They’re installing skimmers at gas station pumps and other places people use debit.

The Headache

“The major problem with a debit card is that when your card is skimmed, the money is taken directly out of your bank account,” Siciliano said. “You have to jump through all kinds of hoops to prove to the bank that you weren’t the one who withdrew money out of the account.”

And you won’t get it back until the bank does an investigation. After receiving notification of fraud, the FTC says the bank generally has 10 business days to investigate. They must tell you the results of its investigation within three business days after completing it and must correct an error within one business day of determining that it occurred. Meantime, while all that’s going on, you don’t have money to pay other bills. (Click here to read more from the FTC)

Debit cards with the Visa and Mastercard Logo limit consumers liability in most cases to $50 if their debit card has been compromised, similar to a credit card.

But with other debit cards, you can be on the hook for up to $500 if you don’t report the fraud within two days.

How to protect yourself

Know your ATM, what it looks like, so you’d notice any changes.

Because of increased surveillance, bank ATMS are thought to be safer than free standing ATMS or ones in convenience stores.

Cover the keypad as you enter you’re pin number…

Use cash or credit at the gas station, But if you do use debit and if your card allows you, select the credit option so you don’t have to enter a pin number (that can then be used at an atm) the money will still be deducted from your bank account, but it will give you some protection.

And finally watch your account. Computers make it easy to check it often.

Jonathan caught the fraud early and didn’t hold him liable for the charges. But he wasn’t happy how they dealt with the overdraft and bounced check fees he was hit with. He closed his account and changed banks.

Robert Siciliano consults with ADT Security and says there is a $2000 unit banks can buy that he says can do away with ATM card skimming. The device sits inside the unit and it detects if the ATM has been tampered with. It can detect a skimmer and immediately calls the bank to inform them of the security breach.

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