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Sales down, debit card fraud up at Walmart

What's the best way to safeguard your debit card? Don't have one

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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.

As a result, the credit union said it will reject all debit transactions at Walmart that are conducted without a PIN. Similar warnings have been issued recently in Pennsylvania and Virginia.

"Effective immediately, you must provide your PIN number for all debit card transactions at any Walmart or Super Walmart," Provident State Bank of Maryland advised its customers.

What to do

Besides keeping a close eye on your account, you can protect yourself from this kind of activity by using your card as a debit card as seldom as possible. Using the credit option provides you with fraud protection offered by your card issuer. If you must use debit, always use a PIN and watch your account balance closely.

The EMV chip you've heard so much about will make card transactions more secure, but because many merchants have not yet installed the necessary equipment, it will be months or years before the system is fully implemented.

The ideal solution is to avoid debit entirely. Use credit cards that do not have a debit option. Paying them off regularly will help you avoid interest charges and keep your account much safer from thieves.

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