In this 2007 interview, host SPEAKER A discusses emerging credit‑card and debit‑card fraud issues with Robert Siciliano, CEO of IDTheftSecurity.com. The conversation opens with a proposed Massachusetts bill that would make retailers financially liable for losses when their security systems are breached, a shift from the traditional model where banks absorb the cost. Siciliano explains that hackers have moved from seeking notoriety to seeking profit, compromising ATM machines, point‑of‑sale PIN pads, and even large retail databases (e.g., the TJX breach) to steal debit‑card numbers and PINs. He advises consumers to favor credit cards over debit cards because a compromised debit card gives thieves direct access to cash in the victim’s bank account. He describes how stolen PINs enable the creation of “white cards,” blank ATM cards that can be used at any machine to repeatedly withdraw funds until the account is drained. Siciliano offers practical tips for spotting ATM skimming devices—looking for mismatched colors, wires, glue, or screws—and stresses that while banks or retailers may ultimately bear the loss, the consumer faces significant inconvenience, delayed refunds, and potential bounced checks. The interview ends with a warning to consumers about the limited protection they have against sophisticated card‑theft schemes.
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Retailers may soon be paying the price for ID theft and credit card theft. The Wall Street Journal says lawmakers in Massachusetts are about to consider a bill that would actually require the retailers to pay for any losses when a hacker or a thief breaches their security system and starts stealing consumers' credit cards, other financial information. If this law is passed, it would be the first of its kind. It would put the burden of the company on— other than the bank. If you're the store, if you're the restaurant, whoever gets ripped off, usually it's the credit card company or the bank that gets stuck with those losses, and this is something— that is really becoming a huge concern because last year those losses topped $2 billion. Before you use your credit card or your debit card, listen up. Our next guest has a warning for you. He says that there is no security when it comes to debit cards. Here now with more on the security breaches, Robert Siciliano. He's the CEO of IDTheftSecurity.com, joining us from Dubuque, Iowa this morning. Sir, thank you for being with us. I'm thrilled to have you here because this has been an issue that's been scaring me and keeping me up at nights. People using their debit cards, what should they be worried about?
Well, the fact is, uh, hackers have really changed their motivation from seeking fame to now seeking fortune, and they're compromising ATM machines, the PIN pads at retailers, even where you pump gas, where you slide your ATM card through and punch in the PIN code. They're compromising those machines as well. And like we've seen with the recent TJX breach, They're even hacking into databases and downloading and compromising millions of debit cards and their PIN codes at the same time.
Now that's the scary thing. If I use my debit card as a credit card, am I safe in that respect or relatively safe?
See, I recommend using a credit card over a debit card because when someone compromises your debit card, they're also accessing the cash, direct access to cash in your bank. Which can limit your ability to function in society. So I recommend using your credit card opposed to your debit card so that you're not limiting your funds.
You know, I get on my high horse about this because mine got ripped off not too long ago, maybe a couple years ago, and someone from Europe was buying stereo systems on my debit card. It was coming straight out of my bank account. If I'm using that PIN number though, then they have access to anything that's connected to that?
The problem is once they have that PIN code and they have the information from your debit card, They can actually create what's called a white card, which is a blank ATM card, and they'll go to your ATM machine or any ATM machine at 5 minutes to midnight, put in that ATM card with your PIN code, take out the maximum dollar amount for the day, and then do it again after midnight, a new calendar day, and they'll continually liquidate your account until they have taken all your money or your account's canceled because you figured it out.
Robert, are you saying that I shouldn't even be using my debit card at a bank ATM?
See, if you're going to use your debit card at a bank ATM, use ATM machines that you're familiar with and look for any potential red flags, things that are out of place. Look for skimming devices that may be placed on the face of the ATM.
How am I— how am I going to know if it's a skimming device?
Well, they look like the face of the ATM, so it's sometimes hard to decipher. But if anything looks out of place, the coloration of a device that's on the face of the ATM is different than what it was the day before, If there's any wires or glue or screws sticking out anywhere. Things that just don't look right, don't seem right. Sometimes these hackers aren't all that sophisticated in their physical operations, so sometimes you may be able to depict when something doesn't look right. So just look for red flags.
If I'm looking around and I see some red flags, I don't use that, okay. But let's say no matter what, no matter how safe I am, something gets ripped off. Eventually, isn't the bank or the credit card company going to cover me anyway?
Well, when your information is compromised via a database, it's downloaded, it's hacked into, and they're extracting funds from your bank account. Ultimately, it's either the bank or the retailer that's going to suffer those losses and not the consumer. The consumer is going to face hurdles regarding getting that money back into their account in time and effort, and then maybe even bounced checks that had occurred while the money was siphoned out of your account. So more than anything, it's an inconvenience for the consumer.
But it can be a pretty big hassle. Robert, thank you for joining us and scaring us this morning. I appreciate it.
