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Debit Card FRAUD
Dispelling the Myths

Chip cards and chip terminals have begun to roll out across Canada. However, it's important to note that the complete transition to chip technology will take a number of years, given the number of debit cards, terminals, and ABMs in the marketplace.

The transition to chip technology will be completed by 2015. Until this time, both magnetic stripe and chip transactions will be taking place, which means that although you have a chip card, in many cases you may be still conducting a magnetic stripe transaction if the store has not yet upgraded its terminals. A secure chip transaction can only take place when a chip card is inserted into a chip terminal, which means that until the transition is complete, we will continue to see fraud on magnetic
stripe technology. Rest assured, financial institutions will continue to aggressively monitor unusual transaction patterns and prevent fraud before it happens, as they do today. Throughout the transition, it's important to continue the same debit card safety practices as you do today. Furthermore, if you have a chip card, insert the card into the terminal first. If the terminal is not chip capable, it will prompt you to swipe your card. By inserting first, you avoid any unnecessary need to swipe, and reduce the potential of being skimmed.

Identity fraud - the theft and use of personal information for criminal purposes, is one of the fastest growing crimes.


MYTH: Fraudsters have access to my personal and financial information if they are able to copy the magnetic stripe on my debit card.

FACT: The type of information stored on your magnetic stripe is payment related information that allows the debit transaction to be authorized and processed, such as the debit card number, the financial institution code, or country code. If captured, fraudsters primarily use the payment information on your magnetic stripe to make a counterfeit card and steal money, not your identity. With the transition to chip, the same information will now be stored within the chip, which is protected by multiple layers of security, making it extremely difficult to copy the information and make a counterfeit card.

MYTH : A chip card isn't any more secure than the magnetic stripe card. I received a call from my bank alerting me that my card had been compromised, even though I had the new chip card.

FACT : The chip itself has not been compromised. The financial institution has called you because they suspect that your magnetic stripe and PIN information may have been stolen from your chip card for the purpose of making a counterfeit magnetic stripe card, not a chip card.

MYTH : If I become a victim of debit card fraud, my entire bank account could be wiped out.

FACT : Victims of debit card fraud are protected and will not suffer any financial losses resulting from circumstances beyond their control. For more information about the Interac Zero Liability Policy, visit www.interac.ca. Your financial institution has monitoring and detection systems in place that detect suspicious transaction patterns, and often prevent fraud before it happens. Also, in the instance that money is taken from your account, financial institutions usually take
immediate action to return the funds to your bank account.

Resources:

OACP Crime Prevention Identity Theft