A few months ago I was shopping and I went to use my bank debit card–it was declined. So I called my local branch and the bank teller pulled up my account and informed me that I had over sixty recent charges that were denied. I was hacked! Related article: 4 Things to Do after Your Credit Card Is Hacked!
A Stranger Was Using My Debit Card
I was given the number to the banks fraud department and had an interesting conversation with a woman over the phone. We first went over all of the declined charges and they were global. Hotel stays in London, jewelry, airplane tickets, spa services, and so on. Someone had gone on a world-class vacation on my dime.
I had to cancel that card and wait for another one to come in the mail. Although a slight inconvenience, I had no real choice in the matter. When I asked her how someone could have obtained my card information, she explained that international hackers simply set up a computer system to run through a series of endless numbers until one hits as active. Then they run up charges until the account is empty.
Fortunately, my bank had safeguards for such intrusions and recognized this as a hack, declining all subsequent erroneous transactions. By the way, this is the second time my bank account has been hacked in the last 3 years.
I consider myself a peon in the realm of money since I don’t have a lot. Which raises the question–why me? Why my measly account? I guess they’ve yet to figure out which active cards belong to wealthy or low income individuals. However, I don’t doubt these hackers are working on finding a computer system that will determine that as well.
A Rise in Credit Card Security Breaches
Recently, all national news programs have been reporting on the increasing mount of credit breaches and pay terminal hacking. At the end of 2013, during the holiday season, Target’s security breach happened and people finally began to realize that no one’s information is safe.
Initially, reports stated that 40 million customers were affected, which then grew to 70 million customers. And again it increased to 110 million customers as reported by CNN Money on January 11th, 2014. We all know that Target was simply the tip of an enormous iceberg.
Albertson’s, Target, Michaels, Neiman Marcus, P.F. Chang’s and SUPERVALU all had their customers’ accounts hacked (Hacker News). Most recently, national news is reporting on a nationwide hacking of Home Depot customers. Not only is the U.S Secret Service consulting with Home Depot, but the company is employing cyber-security firms to nail down what is providing this open window in the world now referred to as the Dark Web.
This Dark Web is the underbelly, as it were, of cyberspace economy, which was recently responsible for providing hacked pictures of celebrities. It was just on September 2nd that Forbes website reported Apple admitting that celebrity photos had been hacked.
New Crimes, Old Technology
We are in a different age of criminal activity, and despite technological advances, we’re still behind on security. Obviously, the United States is behind in credit card security. The magnetic strips on our credit cards are still using 1950’s technology. Most of the international community has been using chip-enabled smart cards and mobile wallets, but it’s still a “new” thing to us.
What’s in a credit/debt card strip? Magnetic strips provide our name or company, card number, expiration date and the CCV security number on the back. If lost or stolen, they’re pretty much a bank account waiting to be emptied. If not used immediately, they are then reproduced and sold.
If Apple’s Apple Pay is as successful as predicted, and current services like Softcard and Google Wallet step up, we could see a major decrease in traditional credit card fraud.
Anyone and Anything Can Be Hacked
Unfortunately, anything transmitted online or through electronic communication is subject to hacking. Last year alone, half of all Americans had their finances hacked in one way or another. Even when it comes to receiving tax returns, hackers are in the loop, stealing your tax return money. In 2012, the IRS had to pay $3.6 billion in fraudulent tax returns. (CNNMoney)
Also, consider the fact that most medical records are stored online. Hackers have actually stolen data from 4.5 million patients so far this year. This gives them access to social security numbers, medicines used, as well as Medicare/Medical accounts for them to fraudulently bill these agencies and get prescriptions for controlled drugs.According to the FBI, 3% to 10% of the $2.5 trillion the US spends on health care annually is attributed to fraudulent activity. If you do the math, this adds us up to $75 to $250 billion dollars a year. Who foots this bill? The taxpayers.
My favorite reporter on this subject is CNN Money writer Jose Pagliery. He is on the cutting edge of understanding what is going on and what we can do to avoid it.
“Every time you swipe a debit card at a store, that transaction is processed on a computer network. That network is connected to the Internet. Hackers break into those computers from far away, infect them with a virus and steal card data,” Pagliery reported CNNMoney.
How to Protect Yourself From Fraud
I was surprised by his recommendations in a September 4th report: “Avoid using your debit card — ever. If it’s compromised, criminals can empty your checking account. Use cash instead. Or use your credit card, because then you’re not liable for fraud,” Pagliery stated.
“Change your passwords frequently, and use better ones. Password123 is easy to remember but easy to crack. Something like H&uy91oP is hard to remember but still easy to crack. Use a long, wacky passphrase like, My52ndDinosaurHouseIsOnFiiire!” Despite his advice, he also states, “But you’re probably not going to do anything after reading this. And that’s why you’ll keep getting hacked.”
After much contemplation as to what one can do, if anything electronic can be hacked, then we will be forced back into placing money and valuables in safety deposit boxes at banks, right? Unfortunately, as I researched this online, I found out that there have been many people whose safety deposit boxes have been compromised as well. (The Washington Post)
There are companies that have responded to this, such as U.S. Private Vaults that are trying to provide us with a greater sense of security when utilizing their services. But ultimately, the best way to protect your funds is to bury it in the ground. There are actually instructions on the website WikiHow on how to store your valuables underground.
If You Were Hacked, You’d Be OCD Too
As I re-read this writing, I realized I sound like a security-obsessed lunatic. Yet I cannot help but realize that the worst is yet to come. Since we are, as Americans, somewhat behind the times of electronic security, everything we do online, especially banking, leaves us vulnerable. I’m getting ready to dig a hole, but am not disclosing its location.