By Stephen Dafoe
Morinville – Change your bank card PIN monthly if you want to make sure your dollars stay in your bank account. That’s the recommendation of Corporal Julie MacFarlane-Smith of K. Division’s Commercial Crime Section North.
“That’s the best advice I can give you,” the commercial fraud expert said at the conclusion of a 90-minute presentation on debit and credit card fraud Mar. 5.
MacFarlane-Smith explained to members of the Morinville RCMP Citizen’s Academy that debit card fraudsters are using more and more technology to take advantage of shoppers. The days of crooks rigging debit machines to record data and PINs have evolved to Bluetooth technology and methods that allow fraudsters to accumulate 3,000-5,000 pieces of information before conducting a mass harvest.
“With Bluetooth technology, they’re getting really, really comfortable with leaving it there for a long time,” MacFarlane-Smith said, adding a bogus keypad can be installed in January and harvested of its data the following December. “They’re getting more patient, but they’re getting more money.”
MacFarlane-Smith said debit card fraudsters often work in crews to swap out point of sale devices. One member of the crew will order something at a fast food restaurant and manipulate the screws of the device a bit. The process is continued by additional crew members until the device can be removed and a decoy installed in its place, a screw turn or two at a time. The process is repeated when the original device is tricked out to allow the thieves to accumulate the data.
Pin pads mounted to posts have not deterred thieves from boosting the units. In fact, the posts make the thieves’ job somewhat easier. “Now that they’re mounted to a certain mount, nobody checks them,” MacFarlane-Smith said. “Nobody takes them out daily, flips them over, and makes sure it’s your serial number and not a decoy. It’s that false sense of security that there’s nothing wrong with it.”
But fast food restaurants and convenience stores are not the only businesses at risk of debit card fraud. MacFarlane-Smith said fraudsters will even put false fronts on bank ATMs. The false front contains a device to record the electronic data from the bank card, while a pinhole camera is used to record audio and video of bank card users entering their pin.
The growth in debit card use over the past decade provides thieves with an opportunity to pocket plenty of cash. MacFarlane-Smith said in 2009, the latest year for which she had figures, there were 22.3 million debit card users in Canada, consumers who made 3.9 billion transactions.
Fraud losses have escalated over the decade. In 2003 there were 29,000 exposed cards and $44 million in losses. Three years later that number had risen to 119,000 exposures and $95 million in losses. That number escalated to $142 million in lost money and 238,000 exposed cards in 2009.
MacFarlane-Smith said CHIP technology greatly minimizes the ability of fraudsters to replicate cards, but many stores are in no hurry to convert their units to CHIP card readers because they do not have to convert until 2015. She said swipe cards will continue to exist because the United States is not switching to the CHIP system due to the large number of small banks and the prohibitive costs of changing their systems.
More information on debit and credit card fraud can be found at www.rcmp-grc.gc.ca/scams-fraudes/dc-cd-fraud-fraude-eng.htm