I’m curious if you guys have experienced something like this before. A few months ago, someone in Mexico suddenly charged my debit card. I’ve never been to Mexico and I don’t know anyone in Mexico. Then my bank froze my debit card and bank account because they had to investigate the fraudulent transaction. They told me to visit the bank branch in person with an ID document to reactivate my account and card. I had to visit a bank branch to resolve this issue. The fraudulent charge of $50 was returned to my account two weeks later. But I realized I have no control over fraudulent charges like this. Someone can try to figure out your card number and charge it.
If something like this happens to you while you’re traveling, what would you guys do? you’ll be require to fly back to the country of your bank to reactivate your bank account and card. That’ll cost so much money and time.
Also, when I was in US few years ago, Bank of America randomly froze my debit card several times. They said it was to prevent fraudulent transactions… they mailed me a new debit card to my home address but it took several days to receive it. I couldn’t use my card and had no access to ATM machines until I receive the new debit card.
Can accidents like this happen to your offshore bank accounts in Singapore, Hong Kong, Georgia, and Panama?
and if it happens to your offshore bank account, what would you guys do? if you have many offshore bank accounts and debit, credit cards, it’s going to be hard to maintain them.
Firstly, someone in Mexico didn’t “figure out” your card number, else you could get rich by just typing random numbers until you found one that works. Either your card was physically cloned in a bar, or since it was used in a different country, it’s most likely you entered your card details on a disreputable website.
If you use an online bank account such as N26/Revolut/Transferwise for online purchases, then you can activate/deactivate your card instantly yourself. They have no branches so you’re never required to go anywhere. And if your existing card is compromised then you can instantly get a new virtual card for online purchases (though you’d need to wait for the physical card to use an ATM). Nor are these modern banks freaked out if you travel to another country, so they won’t lock your card for that reason.
Bank cards can get lost, stolen, compromised, frozen, etc. so always carry multiple backups and a list of all your card numbers with corresponding 24/7 fraud line numbers of the issuing banks.
To reduce risk, avoid using debit cards linked to a primary or otherwise important bank account, instead use credit cards whenever possible and for cash withdrawals etc. use a secondary account or prepaid to which you only move ‘spending’ money.
That’s a good strategy. So you can use a prepaid debit card for all of your daily spending transactions i.e. pay at restaurant, hotels.
The card which Mexican fraudsters charged hasn’t been used for a while. It was a card I was keeping in my storage wallet. I haven’t used it for six months before the fraudulent charge occur. So that means, there are fraudsters who search for card numbers of cards that haven’t been used for some time.
Maybe it’s best to create two accounts at the same bank branch: savings, checking. and connect your debit card to checking account only. Move all of your core assets to savings account which no one can make fraudulent charges. So even if someone finds out your card number, they won’t be able to make any significant amount of charges because checking account will have only daily spending amount.
For online purchases, I’ve been using Privacy.com for a few years. It’s pretty excellent: you create virtual cards that are tied to the first merchant that uses them. So if your card number is leaked or guessed, no other transaction can be made. You can also set monthly or annual limits, or make the card single-charge, for shadier merchants.
Privacy seems to be available to US residents only. Unfortunately I forgot what I had to submit to open it, but I did link it to a US bank account.
In December 2016 Vincent Haupert, a research fellow in computer science from the University of Erlangen-Nuremberg , demonstrated how he could take advantage of security vulnerabilities in order to get access to N26 users’ accounts. Haupert had already notified N26 of the vulnerabilities back in September 2016. N26 acknowledged the issues and claimed that they had been fixed before they became public, adding that no user account had actually been compromised.
In March 2019, German media reported that customers who had their account credentials stolen found it difficult to contact the bank and resolve the situation. Customer advocates reported that there was a growing number of complaints from phishing victims who were unable to access their accounts and found it difficult to contact the bank. In a widely reported case N26 took more than two weeks to restore access for a customer who had €80,000 stolen from their account. The reports raised the question if the rapid growth of the bank had left it ill-equipped to deal with the increasing number of support cases
They’re still very unstable.
So I’m storing my core assets in traditional bank account. N26 can be used as a daily or weekly spending card.
Revolut also provides disposable virtual cards (card number changes after each use). This used to be a premium feature but they recently made it available to free accounts as well.
If you want security and true ownership of your money, the best solution I know of is to store the bulk of it as a stablecoin (e.g. DAI), and invest in a hardware wallet. There are also ways to stake coins and earn interest. I don’t have experience with these, but look up “DeFi Yield farming”.
For passive income, the interest you get from banks is a joke anyway, compared to investing in other safe(r) things like index funds.
I hate banks. They’re slow behemoths that don’t really need to exist nowadays, at least for regular consumers. A transfer, which should really not take more than one second because it’s only a bunch of bits, takes DAYS. You want it faster? Oh you gotta pay up $25 for a wire fee. Fuck that. Use crypto and get a crypto debit card. You can load it up with crypto (including stablecoins), and spend in fiat.
Penny for your thoughts on the recent crisis in DAI when ETH price plummeted? I had some DAI in Oasis but since removed it as the DSR went to 0%. It didn’t inspire a lot of confidence in the system. In general though I must admit I’m really impressed with MakerDAO and DAI, it seems to be an excellent crypto implementation.
