Recently, the consumer card industry has been subject to several debit card security breaches originating at large retail establishments which have garnered national press coverage.
We would like to assure you that Farmers & Merchants State Bank has systems in place to alert us to these breaches, and procedures in place to reduce both your and our risk of loss. Please be aware that banks bear the loss of fraudulent transactions, not merchants or processors, where these breaches originate.
Each breach is unique in how and what card information is stolen. More serious breaches may include the loss of not only your account information, but also your personal information, such as name, address and social security number. These breaches may lead to not only fraudulent transactions on your account, but to more complex identity theft. If this occurs, Farmers and Merchants will send you written instructions on how to notify credit bureau reporting agencies and how to monitor your credit on an on-going basis.
At Farmers and Merchants State Bank, our general policy is to replace cards which we believe may have been involved in card fraud. Our replacement may be immediate if the alert we receive indicates your card has definitely been used in fraudulent transaction attempts. Other times, when there is less risk of loss, we may allow time for you to receive your new card before we freeze activity on your existing card. In this case, we may lower your current card authorization limits to reduce our risk exposure.
For your protection, we engage in on-going fraud monitoring of your card transactions. Activity that is out of your normal usage patterns may be flagged as possible fraud. When this happens, your card may be frozen and transactions declined. This type of activity is what leads to the discovery of larger fraud trends, and unfortunately is necessary for both your and the bank’s financial protection.
When you read in the national news about a breach at a merchant, it generally means that something in their system, or reports of fraudulent transactions in the banking system, alerted the merchant to a compromise of information in their payment system. Protocol dictates that forensic computer specialists investigate the cause and severity of the breach. During that investigation banks are notified through card companies and processors of exactly which cards have been compromised and the level of compromise to the customer. Immediately upon receipt of the compromise notices, we take action as described above.
While it is worrisome to hear in the news that your favorite retailer has been compromised, you should not panic. Usually, Farmers & Merchants State Bank has already been acting on alerts and notices regarding the breach, and most importantly, you are not financially responsible for reported fraudulent transactions on your account.
You are an important part of our fraud prevention program. We offer many access channels, available at no charge, to enable you to regularly monitor the activity in your account. No one knows better than you if a transaction is legitimate or not. Our online and mobile applications, as well as our telephone banking system, allow you to access your accounts 24 hours a day, seven days a week. Please check your account frequently and call us immediately if you see any activity in your account that you did not authorize.