Last year, I wrote a blog post about debit fraud: A $38.5-Million Problem. The good news is that the figure has dropped to $16.2 million in 2014. The bad news; you always have to be wary of scammers, electronic pickpockets, and other crooks looking to steal your money.
The Interac Association attributes much of that drop to the almost-complete rollout of “chip and pin” technology – debit and credit cards with an embedded memory chip that require the user to enter a personal identification number (PIN).
Since their introduction to Canada in 2009, virtually every Canadian debit card has been switched over to chip and pin (from the lower-tech cards where the user signed for all purchases). By the end of 2015, all point-of-sale debit card readers in the country will be chip and pin-enabled as well.
Another way the industry keeps fraud rates down, while still enabling easy-to-use tap payment options (such as PayPass), is to maximize individual transactions at $100 and a daily cap of $200 before entering a PIN is required.
“Criminals are looking for large amounts of cash and highly fenceable goods, not a few coffees,” says Mark Sullivan, Head of Fraud Risk Programs, Interac Association and Acxsys Corporation.
In Europe, where chip technology was first deployed in the early 1990s, they’re already testing out biometric cards that only work in conjunction with a thumbprint scan by the registered cardholder.
The good news for cardholders is that even if your account it victimized by hackers, as long as your bank is sure you took “reasonable care” to protect your PIN, you won’t be liable for any losses. But even if you’re not held responsible for any stolen funds, you’ll want to avoid the hassle of having to cut up your card and wait for delivery of a new one. These simple safety precautions really should go without saying, but enough people make these mistakes to keep the crooks coming back.
- Always shield your hand when entering a PIN.
- Never write down your PIN or other passwords on a note you keep in your purse or wallet.
- Check your monthly statement against the receipts from your purchases.
- Run sensitive documents (old bank and credit card statements, tax documents, pay stubs, etc.) through a shredder before tossing them in the recycling bin.
- Never respond to emails or phone messages asking you to enter passwords or PINs.
Skimming Tops Fraud Fears
The Interac Association commissioned a survey of customer perceptions of debit fraud. Here are some of the findings:
A little less than half (41%) of Canadians are concerned about payment card fraud. The specific types of fraud they’re most concerned about are:
- skimming (49%)
- retail data breaches (45%)
- electronic pickpocketing (40%)
- online shopping (38%)