Skim and Clone. In this case, equipment is set up at a business to illegally collect your PIN and card information. When you give the clerk your card to make a purchase, the card is run through a device that sends your magnetic stripe information to the financial institution. The person then swipes the card a second time to record the information into a hidden device which allows them to make a duplicate of the card. At the same time, a camera records your PIN information.

Bogus machines. This scam involves a bogus machine that replaces the real PIN Pad, lifts your card and PIN information and issues a transaction receipt but does not actually send the transaction to the financial institution. The thief, in this case a store employee, covers your purchase by putting cash in the till so that the owner is unaware of any fraud since the outlet’s books balance. At a future date, the employee uses the stolen data to create a card to empty the funds from your bank account. If your purchase does not appear on your bank statement, this could be an indication of this sort of fraud.

Note: In all the above instances except for the first, you would not likely be liable for any losses.

If you’re a victim
If you think you’re a victim of fraud notify your financial institution immediately. (You may also want to keep a written record of the circumstances of the incident, who you spoke with, etc.) Your financial institution will probably ask questions about the circumstances of the loss to ensure that you did not authorize the transaction or that you did not contribute to the loss.

While financial institutions may cover losses in cases of fraud occurring in Canada, you can be held liable for losses if you are negligent with your PIN and card.

Losses could be more than your bank balance
And in some cases, your losses may be more than the balance in your account. As incredible as it seems, a thief can accomplish this by keying in an amount to increase your balance – and then inserting an empty deposit envelope. The scammer then proceeds to withdraw the cash from your account.

For more information on protecting yourself, click here.

When are you liable?
You may be liable for losses if you have contributed to the unauthorized use of your debit card by:

1. Writing your PIN on or near your card.
2. Keeping a poorly disguised copy of your PIN in close proximity to your card. For example, writing down “Bank-1286”.
3. Selecting an unacceptable PIN selected from your name, telephone number, date of birth, address, or social insurance number.
4. Voluntarily giving your PIN to someone who subsequently contributes to the fraud.
5. Failing to notify your financial institution, as soon as you are aware, that your card has been lost, stolen or misused or that your PIN may have become known to someone else.
6. Failing to cooperate in the investigation of the loss.