Business owners get lesson in fraud prevention

By Stephen Dafoe

Morinville – With fraudulent payment card crimes increasing from 100,000 affected cards in 2007 to 230,000 in 2009, debit and credit card fraud is something the RCMP are concerned about.

Corporal Christine Collins with RCMP K Division was the speaker at the Chamber luncheon Wednesday afternoon and spent 20 minutes bringing the Project Protect message to town, educating local business owners on the evolution of payment card crimes and what buyers and sellers can do to safeguard themselves from being parted from their money.

Collins told her audience payment card fraud is a lucrative criminal enterprise that spans the globe to the tune of $1 billion per year, and is often linked to terrorism and organized crime. The average hit to an individual’s card is approximately $1,100.

Skimming, the process by which criminals access the information contained on a credit or debit card’s magnetic strip occurs most often at restaurants and fast food establishments, gas stations, retail stores, convenience stores, liquor stores and grocery stores.

“At point of sale terminals, they capture your PIN number and banking data in order to make a transaction,” Collins said, adding the most commonly targeted point of sale terminals were the INGENICO 1200 models. “It’s been the preferred target of organized crime groups because they quickly figured out how to beat its security features.”

The RCMP corporal said many stores have upgraded to better and more sophisticated equipment, but that many of the units still exist. Criminals groups need to steal two of the units to make one capable of receiving the critical data they need to perpetrate fraud. Collins said criminals install a skimming pad that records key pad movements, and a wireless system that allows the data to be collected by criminals waiting in the parking lot.

Business owners can help to combat against payment card fraud by making sure proper identification is obtained from people applying for work at their business, and by thoroughly examining information and references. Additionally, it is important to constantly monitor the PIN pad or keeping it under the counter when possible.

“If you have a business with infrequent use of a point of sale terminal, it’s good if you keep them under the counter before each transaction,” Collins said, adding moderate usage businesses can protect their equipment by having them locked onto a stand on the counter. For heavy use, Collins recommends locking them on a stand and ensuring that only the manager or owner has the key. “It’s not going to stop the crooks from getting it,” she said. “If they want it bad enough, they’re going to get it from you. But it tends to really slow them down.”

Collins said the best protection for retailer and consumer is the chip and PIN technology currently found in some banking cards. “We’re hoping to have all terminals chip and PIN equipped by 2015,” she said, adding payment card fraud is expected to decline over the next ten years as the technology becomes more widespread.

However, Canadian terminals will continue to have the magnetic stripe as well because the United States is not coming on board with the newer technology.

“In Canada we have the big five banks who are progressive and they do share information, so that is one of the reason why we’re hopefully going to win this fight,” Collins said. “The USA will not be going to chip and PIN technology. There are just way too many banks to partner with, so they are not at all interested in coming to chip and PIN. We will still have to have the magnetic stripe on all of our PIN pads for our American counterparts who come up to Canada. It’s just too costly for them.”

Collins said the United Kingdom adopted chip and PIN technology a decade ago and have seen payment card fraud losses decrease by 80 per cent.

But whether using a magnetic strip or implanted chip, Collins recommends that shoppers never let their card out of sight.

“My concern with your card leaving your sight is what is he doing with that?” she said, noting it is an opportunity to write down the bank card number as well as the code number from the back of the card that allows the debit card to be used online. “I am very leery about having my debit or credit card out of my sight and I would suggest for everybody to be just as leery.”

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The Morinville News is an online daily and bi-weekly print publication serving Morinville and surrounding area. Our print publication is distributed on the first, third and fifth Wednesday. You can also follow us online on Twitter @MorinvilleNews and on Facebook at Facebook.com/MorinvilleNews

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