Debit cards can be seen as vulnerable to fraud as there is a large amount of money that can be accessed with a reasonably small piece of plastic.  This is something that banks and credit card processors wish to discourage, and to that end they have developed more and more sophisticated anti fraud measures.

There are a number of types of debit card fraud such as impersonation and making false details, but the two main sources of debit card that affect the end user of debit cards are theft and cloning.  Theft is when a card is simply stolen and then used and is by far the most popular form of debit card fraud.  Cloning is when the debit card details are copied and the card is then reused, often over the internet or phone.

One of the most robust protections against fraud has been the growth of chip and pin.  This is when a card is verified by a pin number rather than by a signature.  When this system was introduced into the United Kingdom it cut card fraud by around 80%.  It has started to be introduced into Australia and it is going to be with all payment cards, whether debit cards or credit cards, by 2015.

The key to chip and pin’s security is that debit cards and pin numbers are separately issued.  This means that it is far harder to use a card that has been stolen as it also needs a pin number to activate it.  Fro this reason cards and pin numbers are issued separately, days apart so that they will arrive with the card holder at different times and be harder to intercept by post.

Another key to preventing card fraud is the spotting of unusual transactions.  This can be a sharply increased volume of spending, spending on unusual items – particularly items that can be easily resold – and the use of the card in places where the person does not live, particularly if the card is spent in two places within a very short period of time.

Another guard against debit card fraud is frequently reading bank statements as they are sent.  In this way unusual transactions can easily be spotted.

Both MasterCard and VISA operate zero liability guarantees for unauthorised transactions on almost all the cards offered, no matter who the issuer is.  This depends on the unauthorised transactions being reported in a timely manner and there being no co-operation in the fraud.