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Who’s in your wallet? Banks offer protection against most types of fraud

Denise Coyne, chief operating officer at Greenfield Savings Bank, poses with one of their customer bank cards in the lobby of the Greenfield branch. 
  (Recorder/Paul Franz)

Denise Coyne, chief operating officer at Greenfield Savings Bank, poses with one of their customer bank cards in the lobby of the Greenfield branch. (Recorder/Paul Franz)

GREENFIELD — What does your local bank do to protect you from criminals seeking to steal your identity and drain your account?

“We have mechanisms in place that stop a lot of fraud coming into customers’ accounts,” explained Denise Coyne, chief operating officer of Greenfield Savings Bank. “We have algorithms we use to look at customers’ account activity. Anything out of the ordinary will get flagged for investigation and the customer may receive a call from us.”

Greenfield Cooperative Bank has similar measures in place to detect possible card fraud. President and CEO Michael Tucker says he has seen the system work firsthand.

“I was in Florida last week helping my mother, and I bought her a new TV,” Tucker said. “Because I was buying an expensive electronics item out of state, the purchase was challenged” when he used his debit card.

Pricey electronics are easy to re-sell, said Tucker, so fraud detection systems give them special attention. When his TV purchase was flagged, Tucker got on the phone, verified his information and confirmed that he was indeed shopping 1,500 miles from home. He left the store with his mother’s new TV, albeit 30 minutes later than he’d planned.

While the system helps, it’s not fool-proof, and certain circumstances can cause it to kick in when it’s not needed. Tucker said this often happens at large retail events like the Old Deerfield Craft Fair.

“You have merchants from California, Rhode Island, Ohio and Massachusetts there. If I bought something at those four, fraud services would say ‘there’s no way Mike Tucker is in all those places at once,’ and it would be challenged.”

Faraway purchases are often challenged and banks block some countries entirely.

“Certain countries have been identified as the source of a lot of fraud and we block (transactions from) those countries,” Coyne said. “They can be unblocked on a per-card basis, so it’s best if customers call and let us know when they’re taking a trip.”

Greenfield Cooperative Bank also blocks certain countries and can remove the blocks as long as customers tell the bank they’ll be traveling there. That way, travelers won’t get off a plane in a faraway place and find that they can’t access their money.

While automated account checks and precautionary bans are useful weapons in the fight against fraud, they can’t catch everything.

That’s where you, the cardholder, comes in.

If your credit card number is stolen and used, you may not know until you see some unexpected charges on your monthly statement. Your first sign that someone’s dipped into your checking account may be a bounced rent check, unless you’re keeping an eye on your balance.

“The best thing customers can do to help us and help themselves is to monitor their accounts through Internet banking,” said Coyne.

Both Greenfield Savings Bank and Greenfield Cooperative Bank offer free online banking and encourage customers to use it to monitor their accounts regularly.

In a world where thieves can install their own piggy-backed card scanners on gas pumps, pocket-sized “skimmers” can allow waitstaff to read your card en-route to a restaurant’s register and computer-savvy criminals can steal thousands of card numbers by hacking retailer databases like those at Target, there’s one way to protect your in-person transactions.

“Cash is still king,” Coyne advised.

Of course, if your cash is stolen, you probably won’t get it back with a simple phone call.

New cards eyed

Some banks and credit card companies are issuing cards with their data on encrypted microchips instead of a simple magnetic strip. Used with a corresponding chip card reader, they can help keep your information out of thieves’ hands.

Such cards are routinely being used in Europe, but are only slowly making their way into American retail outlets and banks.

But they’re still not fraud-proof.

“Chip cards only work if the card is present for the transaction,” said Tucker. “They don’t prevent online fraud.”

While the microchips make it harder for thieves to “clone” cards, they can still use card numbers to spend your money online.

Some banks use daily transaction limits to help curb fraud.

“We have a daily limit of $410 for cash withdrawals, and a $1,500 limit for debit purchases,” said Tucker. “People can also call to have their daily limits lowered, or temporarily raised.”

Tucker said this means thieves can’t get everything at once, and gives banks and customers time to catch the fraud, and police time to catch the criminals.

So what happens if you do fall victim to fraud?

“When we get notice that a customer’s account has been compromised, we react really quickly,” said Coyne.

Tucker said his bank gives customers a provisional reimbursement within a couple of days, while a fraud investigation is conducted. He said banks are given 10 days to complete these investigations by law.

To stop further fraud, both banks will replace the customer’s card with a new one, complete with a new card number.

“Some banks will monitor an account (after fraud is reported), and that’s fine,” Coyne said. “We take the position that we want to get a new card into the customer’s hand. It’s more peace of mind for them and us.”

Greenfield Cooperative Bank also prefers to issue new cards for compromised accounts.

Both banks take immediate action in the case of large-scale data breaches like the ones that happened at Target and Michaels Stores this winter.

“We will automatically replace cards if they were possibly compromised in a large breach,” Coyne said.

“We reissued about 500 cards that were listed among those compromised in the breach of Target’s data,” Tucker said. “We only had two of those where people said there were unauthorized charges.”

Because the breach occurred during the Christmas shopping season, Greenfield Cooperative Bank customers were immediately notified, but their cards remained valid. They were replaced right after New Years Day, Tucker said.

Greenfield Savings Bank customers can have their cards replaced while they wait in the bank. Coyne said new cards can be issued on-site in as few as three minutes.

Greenfield Cooperative Bank customers get their new cards in about a week. Tucker said the bank may offer instant replacement in the future.

Though account holders are not liable for most fraudulent debit card purchases, they may be on the hook if they lend their card to a friend.

“If you give someone your PIN and card, and tell them to just take out $50, and they spend more, that’s still considered an authorized charge, and you’re liable for it,” Tucker cautioned.

He said this is done to protect banks, in case someone decides to have a friend withdraw money, declare it fraud, and turn a profit.

While some sophisticated anti-fraud systems can go a long way to protect cardholders, common sense can go a long way, too.

“You would be surprised at how many people write their PIN on the back of their debit card,” Tucker said.

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