A Way to Lock Lost Debit Cards, From a Big Bank

Almost everyone with a bank account has encountered this situation: You return home after shopping, or dining out, and discover that your debit card is missing.

Frantic phone calls to stores and restaurants ensue, as you mentally retrace your steps to determine where you may have left the little plastic card.

More banks are now offering a simple tool to protect bank accounts quickly, while the customer figures out where the card might be and retrieves it — or decides it’s lost and requests a new one. It is known as a debit card lock, or “on/off” switch, and it requires just a few taps or swipes on a mobile phone.

This week, Bank of America became one of the first big national banks to offer the feature to its debit card customers who use online or mobile banking.

“It’s addressing customers’ concerns,” said Michelle Moore, head of digital banking at the bank. She noted that in contrast to credit cards, debit cards are linked directly to accounts holding customers’ cash.

The lock technology has been available for several years. Malauzai Software, which makes apps for financial institutions, says about half of its 350 community bank and credit union clients offer the feature to their customers. Other card issuers offering versions of the feature include USAA, which has offered it since 2012, and Capital One.

Banks are offering the feature not only to give customers peace of mind but also to reduce the cost of issuing new cards, said Al Pascual, director of fraud and security at Javelin Strategy and Research.

In 2014, a year when many retail data breaches made consumers nervous about the security of their credit and debit cards, nine out of 10 people affected by a data breach received at least one new card. “The cost was tremendous for banks,” Mr. Pascual said.

Ms. Moore said fewer than 20 percent of Bank of America’s debit card holders call to have a card reissued because it was left behind somewhere. But that is still a large number, she said, because the bank has more than 30 million debit card holders.

Here is how Bank of America’s version of the debit card lock works (other banks’ features are similar): Users log onto their accounts on a phone or other device (the mobile app must already have been downloaded), and select “Manage debit card settings” under the help menu.

An image of the debit card appears, and the user swipes an “on/off” switch to lock the card. The app asks, “Are you sure?” and the customer taps a confirmation screen to lock the card.

Once the card is locked, it cannot be used to make purchases or withdraw money from automatic teller machines until the user unlocks it. Other types of transactions, like automatic deposits and bill payments, are not affected, Ms. Moore said.

Other big banks, like Chase, Citibank and Wells Fargo, do not yet offer the debit card lock feature. A Citi spokesman said customers do have the option of locking their debit cards at any time by calling the bank (they can call again to have them unlocked). A Wells Fargo spokeswoman said the bank’s customers could opt to receive text messages when the bank notices suspicious transactions.

While the original idea was that consumers would use the debit lock occasionally, in case of a misplaced card, Robb Gaynor, co-founder and chief product officer at Malauzai Software, said many users choose to leave their cards turned off as a default setting and unlock them when they use them.

“They’re using it to prevent fraud,” he said. “They turn it off. Then, when they check out at Piggly Wiggly, they turn it on.”

Initially, there was some concern that a consumer who turned off a card and forgot to turn it back on might be frustrated. But the card can be turned on quickly via mobile phone, so that has not been a problem, Mr. Gaynor said.