WARNING: Your debit card may be compromised sooner than you think

Posted in Financial, security by Simon Tonekham on December 23rd, 2007

As you people are doing your last-minute Christmas shopping for the big day, I want to tell you a very big nightmare that could happen to you and you may never realized unexpected until you find out the damage has finally done:

I was reading an article on Citynews.ca about a debit card scam taken place on the streets of downtown Toronto (Queen Street to be exact) and someone out there allegedly decided to spy on the customers’ PIN numbers as they use their bank card to steal the customer’s information and somehow steal that person’s money!!! From what I heard, this is blasphemy! This is ridiculous! This is an outrage! It literally traumatized many customers and eventually asked the banks to compensate for the entire loss.

From my experience, I demanded that the implementation of chip-based bank cards should be expeditied as soon as possible. It will be at least after 2010 until all bank cards (debit and credit) will be equipped with chip cards. So far, many PIN pads are equipped to handle the new chip cards. However, there’s one serious loophole. Fraudsters might find a way on how to break the chip card system and eventually steal the money!!!!!

If you have a bank card, here are a few tips that you should to protect yourself:

Change your PIN number at least once a month
Cover the PIN pad on the external device or bank machine by using your hand or covering up your entire body
Check your statements daily.
If you suspect that you have a fraudulent transaction that you didn’t do, REPORT TO YOUR BANK IMMEDIATELY.

So far over the past few months, many debit card rings were broken up and many individuals arrested. Debit card scam in the common numerator is equal to traumatized consumers on the common denominator. Here are few pictures of many devices seized by the police:

As I speak, a pilot project is now underway in the Kitchener-Waterloo area on Chip cards. The trial will conclude next fall on October 2008. The town of Saint-Jérôme, Quebec will commence it’s own pilot project starting in the Spring of 2008. As for Tim Hortons (who is already accepting Mastercard for it’s payment along with PayPass), I’m not sure how they will play a role on chip card-based transactions. Until they can solve a problem to that, it’s anyone’s guess how they will cope.

I have yet to see Visa Cards in Canada equipped with PayWave, along with Amex’s ExpressPay system….

References:

http://www.citynews.ca/news/news_15438.aspx

http://www.citynews.ca/news/news_17940.aspx

http://www.edmontonsun.com/News/Edmonton/2007/03/16/3763801.html

http://www.canada.com/vancouversun/news/story.html?id=7b850a1b-6e7b-46b7-a0d1-231542e5fefe&k=23360

http://www.thetelegram.com/index.cfm?sid=92038&sc=82

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20071016/Interac_test_071016/20071016?hub=Canada

http://www.pwgsc.gc.ca/recgen/colloquium2007/presentations/workshop5-paolo-pizzuto-e.html

http://www.marketwire.com/mw/release.do?id=748409

http://www.secureidnews.com/news/2007/07/05/national-bank-of-canada-to-conduct-a-smart-card-pilot-project-summer-2008/

Information about Chip Cards: