When Marine veteran Luis Agostini tried to use his debit card Feb. 10, it was declined. He knew he had plenty of money in his account at Marine Federal Credit Union, but couldn't reach anyone that night to get to solve the problem.
The next morning, he said, the representative asked if he had received a new debit card with embedded chip technology. He had received it in December, but hadn't activated the new card by the deadline set by the credit union. Because he had missed the deadline, he was told, Marine FCU deactivated his old debit card as well as the new one. Thus, he was without a working debit card until another card arrived by mail — in seven to 10 days.
It was unfortunate timing — just before Valentine's Day, and he and his wife were traveling to New York City for the weekend. "Thankfully, I have a credit card," he said. He still had access to his checking account, and could transfer money to his wife's checking account through another financial institution so they could use her debit card; or he could find a branch of another credit union nearby that had a shared branching partnership with Marine FCU.
Agostini says he doesn't recall receiving a notice that there was a deadline to activate the new card, and believes the credit union should have been more proactive in sending out a notice before shutting down his card. Marine Federal Credit Union officials say notices were sent along with the new cards, and at least one additional notification was sent to remind members of the deadline. There also have been reminders on the credit union's website.
Marine FCU and other financial institutions have been replacing debit cards and credit cards with those that have microchip technology. The microchips make it less likely that your card will be used for fraudulent purposes for in-person transactions. The microchip contains the same personal information that is printed on the outside of the card. The chip changes the encrypted numbers for every transaction. Initially at least, cards will still have the magnetic strip on the back; this gives merchants more time to upgrade their technology to accept the chip cards.
In Marine FCU's case, it has been replacing cards gradually, with the rollout of new debit cards expected to be finished by the end of March, said Tabitha Ernst-Chadwick, chief risk and compliance officer for Marine FCU.
"We can't leave cards out there that aren't activated," she said, because criminals could use them.
"It’s really important to activate those new cards," she said. She understands the inconvenience, but the credit union is staying in line with technology, she said. "We have to adhere to security measures."
She encourages members to read their email and their postal mail promptly. This is sound advice for everyone — especially in the highly mobile military community. Before you make a permanent change-of-station move, notify your financial institution of your change of address. If they offer the option of email and/or texting notifications, consider that as well. Your financial institutions won't ask you for personal information by email, but they might send you important notifications such as this one.
In general, cards in such situations are deactivated "sooner rather than later" to protect the member and the financial institution, said John Best, a payments expert who is a partner with the Credit Union National Association. Financial regulators also have rules about how long a debit card can be in a customer's possession without being activated. "The idea you'd have a live card out there that's not activated ... it's a liability," he said.
Karen Jowers covers military families, quality-of-life and consumer issues for Military Times. She can be reached at kjowers@militarytimes.com
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
