“In 2009, $142 million dollars was reimbursed to victims of debit card fraud,” said Tina Romano, Interac’s public relations manager. “To put this into perspective, of the four billion transactions processed through the network, 99.99 per cent go through without incident. However, any amount of fraud is a concern.”
Skimming, or the fraudulent collection of credit card information and PINs, has been around for a long time.
“There are a variety of tactics that fraudsters use to steal this information. In some instances they install tiny card reading devices to copy the magnetic stripe and use pinhole cameras to capture the PIN as it’s being entered.”
“In other instances, fraudsters are stealing the PIN pad terminals from the store, tampering with them, and then putting them back into the store, without the retailer’s knowledge. As transactions are processed through the terminal, it captures the magnetic stripe and the PIN, and is then used to produce a counterfeit card,” said Romano.
But recent reports show that the era of pinhole cameras is being replaced with more sophisticated technology.
Tech-savvy criminals now use memory cards and Bluetooth technology to skim people’s payment card information. The goal is the same—steal the card number and PIN, then make duplicate copies of the card for an effortless payday.
With the new technology, fraudsters don’t even need to return to the store to retrieve their dummy pad. With Bluetooth, they can conveniently and wirelessly download the information onto their computer while sitting in a car outside the store. While the entire process might have taken them months before, now it will only take them a few hours.
Education and proper monitoring are crucial to avoid being a victim. Programs like Project Protect inform businesses how they can keep their businesses and their customers safe from this crime. Through this collaborative program, area merchants receive crucial tips and training from local police.
Another way is by using cards with chip technology. Romano said all payment cards will soon be using chip technology.
“Chip puts the power of a computer onto the card, making it extremely difficult to duplicate. By the end of this year, 65 per cent of cards and 65 per cent of ABMs will be upgraded; by 2012 all debit cards and ABMs will be converted to chip; and by 2015 all point-of-sale terminals will be converted to chip. After 2015, magnetic stripe transactions will no longer be used in Canada.”
With proper checks in place, you can protect yourself, or your business, from skimming.
Tips for merchants:
- Keep the PIN pad out of sight. When not in use, store it somewhere safe to prevent it from being stolen.
- Carry out routine site inspections so you can identify signs of tampering.
Tips for consumers:
- Always shield your PIN during every transaction.
- Check your financial statements regularly and if you notice anything unusual, report it to your bank.
- If you have a chip card, and you see a chip terminal, insert your chip card.
For more information on Project Protect, visit www.interac.ca/pdf/ProjectProtectEN.pdf