6°c Clear
18°c Sunny
Winnipeg Free Press - PRINT EDITION
Chip cards still at risk
Swipe machines target of fraud
MONTREAL -- Shopping and swiping your credit card could leave you at risk for fraud. So can dining and paying for your meal with a swipe of your credit card.
Even though Canadians are increasingly using credit cards with chip and personal identification number (PIN) technology, there are still some businesses that rely on the swipe of a card's magnetic stripe to process transactions electronically.
"There is a misconception among consumers that if you have a chip and PIN number, credit card fraud isn't going to exist," McAfee online security expert Robert Siciliano said.
Credit-card fraud will continue until the magnetic stripe, which can also access account information, is phased out and taken off the card, Siciliano said.
Thieves know they can still win big with the card's magnetic stripe and consumers need to pay close attention to monthly statements for unusual charges, he said.
"These organized criminals are actually packing up, leaving their home country and flying into countries where those cards exist," Siciliano said from Boston.
They set up shop, swap point-of-sale terminals at stores and restaurants and install skimming devices on automated teller machines because they know the "clock is ticking" on credit-card swiping, he said.
Siciliano said the United States, where chip and PIN technology isn't yet widespread, is the main target -- but Canada isn't immune.
"They know the countries that have that technology still in existence will eventually go to chip and PIN. There's a tremendous amount of money to be made right now and all studies point toward a rise in these crimes."
In Montreal, RCMP recently dismantled an international criminal ring alleged to have been involved in a $100-million debit- and credit-card scam.
RCMP have said the criminal ring's most popular scam involved stealing point-of-sale terminals -- in which consumers insert their credit cards and enter a PIN number -- from businesses and modifying them to steal credit card information.
RCMP said the terminals were rigged using short-range wireless technology to relay information to fraudsters remotely.
Visa Canada's Michael D'Sa said data on a credit card's magnetic stripe isn't encrypted.
But banks already do a higher level of scrutiny before approving a transaction with only a credit card's magnetic stripe, which helps detect fraud, he said.
If the magnetic stripe was copied and used fraudulently at a chip and PIN terminal, the bank would be "suspicious" as to why the chip wasn't read to process the sale, said D'Sa, head of payment system security at Visa Canada.
So far, the encryption on the card's chip has not been cracked by thieves, D'Sa said from Toronto.
"As cards expire, the banks have to issue the chip card with even greater encryption. Basically it's like having a bigger lock on your front door."
McAfee's Siciliano said the chip and PIN technology has been "cracked" in a controlled environment in a laboratory, but to his knowledge there are no known cases of thieves doing so. It's a much more secure technology, he added.
"If and when that day ever happens, there will be serious consequences to that."
Visa Canada said it's not able to disclose a timeline to phase out the magnetic stripe on its credit cards, and there would have to be complete migration to chip and PIN technology before it could be considered.
Visa Canada said fraud involving Canadian credit cards was $436 million in 2011, up slightly from 2010.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition August 11, 2012 A1
More Personal Finance
- Back to Top
- Return to Personal Finance
More Personal Finance
(1 of 6 articles for this week)
Women face unique financial challenges
05/21/2013 9:00 AM 0(Special) - Canadian women undoubtedly are gaining more financial power and control than ever, but in spite of this they ...
Poll
Most Popular Personal Finance
- Bridging the gap
- Women face unique financial challenges
- The ready-made solution evolution
- Arizona bound: Canadians snapping up homes, but they need to be careful
- Experts urge buyers to take precautions when buying used cars and trucks
- MONEY MATTERS: The high cost of eating
- At a premium
- Missing tax deadline can lead to benefits being cut, even for those owed refunds
- Flaherty discounts fears over housing, calls correction a 'healthy' development
- Rising cost of food causing Canadians to shop more carefully, survey finds
- Bridging the gap
- Experts urge buyers to take precautions when buying used cars and trucks
- The ready-made solution evolution
- At a premium
- Women face unique financial challenges
- Missing tax deadline can lead to benefits being cut, even for those owed refunds
- Rising cost of food causing Canadians to shop more carefully, survey finds
- Rent to own
- Home sales down 3 per cent from year ago while price index rises slowly
- Flaherty discounts fears over housing, calls correction a 'healthy' development
- Missing tax deadline can lead to benefits being cut, even for those owed refunds
- Funny money? Focus groups felt new $5 plastic notes too "cartoonish"
- Follow the tax dollars: website shows where federal dollars are being spent
- The cottage and cabana plan
- The first-time homebuyer's dilemma
- Bridging the gap
- Flaherty discounts fears over housing, calls correction a 'healthy' development
- What recovery? For young Canadians, labour market as bad as during the recession
- At a premium
- Arizona bound: Canadians snapping up homes, but they need to be careful
- Bridging the gap
- Experts urge buyers to take precautions when buying used cars and trucks
- Women face unique financial challenges
- Bridging the gap
- Investing lessons from the golf links
- Experts urge buyers to take precautions when buying used cars and trucks
- Women face unique financial challenges
- Bridging the gap
- The first-time homebuyer's dilemma
- Tax issues of owning U.S. property
- Seniors, working Canadians get tax breaks
- Arizona bound: Canadians snapping up homes, but they need to be careful
- Great-West Lifeco. reports first-quarter sales, revenue increases
- Missing tax deadline can lead to benefits being cut, even for those owed refunds
- Pension reform demystified
- U.S. citizens living here: Do your tax duty
- Disability tax credit still being wrongly denied
Ads by Google
You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.
Have Your Say
New to commenting? Check out our Frequently Asked Questions.
The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.