Attention Walmart & Online Shopper’s: Debit Card Theft

debitIt came to my attention yesterday that Walmart and other merchants as well as online retailers like Amazon etc... are charging purchases you make with them as Debit Card PIN purchases without you having to enter your PIN number. Walmart Stores has not informed it's customers of this practice nor has any of the other merchants and online retailers despite you being at risk if your Debit Card number or card is stolen.

On Friday October 30, 2015 I made two purchases at Walmart in Cocoa, FL on Clearlake. The first purchase I paid using debit with my PIN to obtain cash back which totaled to $148.00. The second purchase came to $33.00 and before I could select the "change payment method" button on the card terminal the cashier had already hit the button to total out the transaction. When I looked  at the receipt I asked how she charged my Debit card as a Debit purchase without me entering my PIN, she said "I didn't the register did." I sought out the store manager and a manager named Cathy told me that I was mistaken, that the store cannot charge $2.00 on a debit card without you entering your PIN. This despite me having both receipts showing both were processed as Debit Card PIN purchases.

Sales down, debit card fraud up at Walmart

For years, Walmart used "Watch out for falling prices" as its slogan, but today it's Walmart's stock price that's plunging, down 9.9 percent at midday as the giant discounter warned that earnings will slip as much as 12 percent in fiscal 2017, Bloomberg News reported. Analysts had expected a slight gain, so the news hit investors hard.

Security analysts, meanwhile, are concerned about what they say is a gradual but consistent rise in the number of fraudulent purchases being made at Walmart. Some financial institutions have even started denying debit card transactions at Walmart unless a PIN is used.

Fraud alerts have been issued in at least 16 states this year, according to CSO, an online journal of corporate security managers.,

There's no suggestion that Walmart's card processing network has been compromised but there may be something else at work, and given the huge number of stores and the even larger number of transactions at those stores, tracking down what that something might be isn't likely to be easy.

The most likely explanation is that criminals are using compromised cards at Walmart stores, making smaller purchases that don't require a PIN. That's why it's important for consumers to keep a close eye on their debit card accounts; your card can be compromised without your knowing it and your account could be cleaned out before you realized anything was wrong.

Fraud pattern

The latest alert, CSO reported, came from the Philadelphia Federal Credit Union, which warned customers of fraudulent activity at Walmart locations throughout the country.

"The fraud pattern includes charges $50.00 and under which are being processed as "Pinless Debit" transactions. During these transactions, your card is swiped, but you are not asked to enter your PIN (Personal Identification Number) or sign for the transaction," the notice says.

So you understand the importance: Any purchase made as a "Debit Card PIN purchase" regardless of whether the purchase is made with a lost or stolen card you are OUT that money NO MATTER WHAT. A Debit Card Visa or MasterCard purchase processed as "credit" protects you against loss by unauthorized use of your card.

Consumer Alert: Debit card fraud at Walmart discovered in 16 states

Criminals cashing out compromised debit cards, avoiding detection until it's too late by staying below a $50.00 price point

The most recent alert was sent on October 10. Philadelphia Federal Credit Union told customers that the non-profit has been made aware of fraudulent activity at Walmart locations throughout the country.

"The fraud pattern includes charges $50.00 and under which are being processed as "Pinless Debit" transactions. During these transactions, your card is swiped, but you are not asked to enter your PIN (Personal Identification Number) or sign for the transaction," the notice says.

As a result, all debit transactions at Walmart that are conducted without a PIN will be rejected. But Pennsylvania isn't the only state with consumer warnings and debit card fraud.

Cathy then tried to tell me that it could be that my Bank allows debit card purchases up to a certain amount without requiring your PIN. I called the Bank and card issuer and both informed me this is not them but instead is the merchant. Turns out after contacting the card issuer I found out that merchants (mostly online retailers) have been processing purchases made with Visa or Master Card debit cards as "Debit Card PIN purchases" because they pay less per transaction than if they process the payment as credit. After calling Walmart Corporate office yesterday I found out the following:

Any payment made with a debit card where the cashier hits the final transaction button before you decide if you want debit or credit, that is no more than $50 will be processed as a "Debit Card PIN" purchase without you having to enter your PIN number. Per Walmart Corporate retailers came together to implement this process to save on credit card processing fees. Walmart even admits that should someone use another persons Debit Card and does not ask for cash back or the total does not exceed $50.00 the cards authorized owner is going to be out that money.

Some of you may say it's just $50. But what if someone took your debit card and made six purchases for $50 and then took each purchase back to return it? See Debit Card purchases are refunded by retailers in cash because the debit card payment is as instant as cash.

All retailers, Walmart, Target, Amazon, Kmart, et al need to notify it's customers of this practice and let the customer decide if they want the retailer processing a payment as a "Debit Card PIN" purchase without requiring the PIN to be entered. See statement:

About PIN-less Debit Payments
Amazon may process debit card payments as a PIN-less debit transactions. Although the transaction will be processed like a PIN-debit transaction, the Personal Identification Number (PIN) won't be required.
Your financial institution may charge you a fee for payments we process as a PIN-less debit transaction. If you have any questions regarding the terms and conditions of your debit card, contact your financial institution using the telephone number found on the back of your card.

The Holiday shopping season is upon us and as is the case every year there is going to be a lot of debit and credit card losses, thefts, and unauthorized use. Every individual who is a victim of debit card loss or theft is subject to be drained of every penny through purchases with these retailers that you will never get back because the purchases were processed as "Debit Card PIN" purchases.

The fact that the manager at Walmart wanted to argue with me and tell me that Walmart does not and cannot charge a debit purchase without a PIN being entered made me hot. Especially considering Walmart Stores have had fraud alerts issues in 16 states already.  The fact that Walmart Store Managers cannot be honest with a customer about this "PINless" Debit Processing of Debit cards needs to be addressed.

Everyone who has used your Debit Cards at Walmart or Target or Amazon or online needs to check your statements. If these purchases were processed as "Debit Card PIN" purchases and you thought you were paying by credit you need to have the retailer explain why and who authorized the different payment process type.

Be informed, check your receipts. If you paid wanting the credit payment option and your receipt shows it as an EFT Debit payment call them out.

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