OTTAWA -- Canadians are among the world's most prolific users of debit cards. However, according to new research done for the Financial Consumer Agency of Canada, many may be too complacent about the security of their cards.
The research, conducted last year by Environics Research Group and released this month, found evidence that consumers have a poor understanding of their potential liability for losses from debit card fraud.
Under a voluntary code that governs debit use, consumers may be liable for the unauthorized use of their cards if they fail to properly protect their PIN numbers.
The code says people are deemed to have disclosed their PIN number voluntarily -- and are thus liable for losses -- if they select a PIN from their name, telephone number, date of birth, address or social insurance number.
In a survey of 1,600 Canadian debit card holders, fewer than one in four knew their financial institution would not reimburse them for debit card fraud if they used easily identifiable PINs.
As well, few knew they could be held liable for money fraudulently removed from a line of credit or overdraft linked to their account.
The findings suggest "additional efforts are required to ensure that debit card holders are informed about their responsibilities under the code," the researchers say.
Canadians have embraced debit cards with a vengeance. The cards surpassed cash as the preferred method of payment in 2001. Last year, the 21 million active debit cards in Canada were used for more than 3.4 billion point-of-sale purchases.
The survey found four per cent of debit card holders -- one in 25 -- have reported fraudulent use of their card within the past 12 months.
Overall, however, nine in 10 Canadians say they are satisfied with the job financial institutions are doing to minimize debit card security risks.
Though point-of-sale purchases are the most common debit transactions, just 23 per cent describe them as very secure. A further 53 per cent say they are somewhat secure.
Consumers express most unease about using their cards to make withdrawals at ABMs that don't belong to financial institutions. Just eight per cent consider those very secure.
-- Canwest News Service
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