RCMP warns of payment card fraud

This article was published by The Leader Post on March 6th 2012.  To see this article and other related articles on The Leader Post website, please click here.

The RCMP is kicking off Fraud Awareness Month by alerting the public of some of the most common frauds in the country.

Staff Sgt. Scott Lambie, of the RCMP Commercial Crimes Unit said Saskatchewan is not immune to fraud.

During Week 1 of the month, the RCMP warns consumers and retailers about how easy it can be to become a victim of point-of-sale (POS) terminal payment card skimming. This activity was one of the top reported scams for 2011 with an estimated loss of $500 million for victims.

“It’s one of those frauds that tends to be very lucrative for organized crime groups,” said Lambie. “Most of the frauds we have been encountering lately have been a result of organized crime coming into Saskatchewan.”

As part of Fraud Awareness Month, the RCMP’s Commercial Crimes and Fraud divisions have joined forces with the Regina Police Service, Saskatoon Police Service and the Saskatchewan Financial Services Commission to help educate the public and raise awareness to help prevent and reduce the number of fraud victims in the province.

Debit and credit card fraud have become big business both for individuals and organized groups. There are various types of payment card fraud, but in recent years it often refers to skimming. Skimming is the term generally used to describe illegal copying of credit or debit card data. Fraudsters can acquire this information through POS terminals that have been altered to capture the account information included on a card’s magnetic strip.

Lambie said this type of fraud can occur almost anywhere.

“Basically, (scammers) will attend to a merchant very close to closing time,” he said. “They will steal a point of sale terminal and replace it with a dummy so the clerk doesn’t recognize it missing and overnight they will insert parasital electronics into it, which basically consists of some Bluetooth technology and some skimming technology and then they will go back to the store in the morning and do the opposite, switch out the dummy with the legitimate one and put it back into service.”

In many cases the altered terminals can also capture the personal identification number once the bank card’s magnetic strip is swiped. Once this data is harvested it can be used to make up counterfeit cards. Counterfeit debit cards can be used to access people’s bank accounts. An organized group using a large volume of counterfeit debit cards can easily make fraudulent withdrawals in the hundreds of thousands of dollars over the course of a weekend.

The RCMP says that they are seeing dramatic yearly increases in skimming type frauds.

The good news is, with the introduction of chip-card technology, that trend has been reversed. Last year, there was a significant decrease in the overall losses related to this type of fraud and projections are this year will see another marked decrease.

However not everyone has made the switch to chip-card technology, so the RCMP are reminding people to follow a few simple steps to help protect themselves from becoming victims of this type of fraud.

“Merchants should treat those (POS) devices as cash and don’t leave (them) on the counter,” said Lambie. “Put them behind the counter or behind the register when not in use. You wouldn’t leave $20 on the counter just for someone to come along and pick up.”

He advises customers to get in the habit of protecting their pin and monitor their bank statements for unusual transactions.

“If you notice something contact your bank and if you think it’s fraud call the police,” said Lambie.


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