Keep Debit Card Criminals Out of Your Bank Account


by Rodney Noriega


If you’re a busy student or on a tight budget, you won’t want your bank account emptied by debit card fraud. But that’s exactly what could happen if you don’t learn how to protect yourself.

Debit card fraud is increasingly common now in Canada. Recent advances in technology allow criminals to steal money from your bank account by getting information from your debit card.

In Canada, we’re especially vulnerable because we rely so much here on debit cards. Canadians own more debit cards than almost any other country in the world. We also conduct more debit card transactions than most other countries.

According to Sergeant Tim Kreiter of the RCMP’s Commercial Crime Section, the skills and information criminals need to hack our debit cards is widely known – and easy to use.

“This appeals to the criminal element in that it is cost effective, fast, and relatively risk free of detection or apprehension,” explains Kreiter. “Also the returns are straight cash money, as opposed to credit card fraud which usually requires the purchase of merchandise and the conversion of that fraudulently obtained merchandise into cash, usually at a substantial discount.”

Criminals also have no problem meeting the technological requirements for debit card fraud. It’s easy and legal to purchase such items as a card reader and writer, a surveillance camera, blank card reprogramming software and the like. It can even be done online.

So how do criminals use this technology to steal from people’s bank accounts? They commonly use a method called debit card skimming. This is also sometimes called ‘cloning’ because they copy information from your card.

Using hidden or miniature cameras near an ATM, criminals are able to watch you type in your personal identification number (PIN). Another tactic is to use false or altered PIN pads (where you enter your PIN number). One gang was caught using false fronts to add their equipment to ATMs. Others have an accomplice look over your shoulder as your enter your PIN. Once they have your PIN information, the criminals can assign it to a counterfeit card and make unauthorized withdrawals from your bank account.

The most common locations where debit card fraud occurs include small convenience stores, gas stations, and even ATM machines.

With small convenience stores and gas stations, be wary of employees who may be involved with debit card schemes. Sometimes they may tell you that the transaction didn’t go through. This will require you to enter your PIN again. They may also swipe your card onto a card-reading device that is kept out of sight, such as under the counter. The card-reader scans the electronic data from the magnetic stripe of your debit card. However, since this data does not contain your PIN, thieves can’t operate unless they also get your PIN.

If you use your debit card and the employee tells you that your card is jammed or stuck in the machine, this may be another tactic to have you enter your PIN a few more times. If this happens, be extra alert for possible hidden cameras or other people looking over your shoulder as you enter your PIN. Better yet, don’t use your debit card at all in these higher-risk locations. Just pay by cash.

Criminals have similar methods for bank machines (ATMs). They just install devices on the ATM machines to steal your information. A card reader can be placed on the entrance door to the bank’s ATM. Or it can be placed over the card slot in the actual ATM. Hidden pinhole cameras can also be strategically placed to record the PIN you enter.

This is why it can be safer for you to deal with a bank teller for transactions. However, while unlikely, there is still the possibility that your bank teller is involved with organized crime and is helping to steal your money.

The goal here isn’t to make you paranoid of debit card use. After all, shopping with debit cards is very convenient. But you should be aware of this variety of debit card fraud tactics, besides the obvious surf and pick-pocketing method where thieves simply watch you enter your PIN and then grab your debit card and run away. At least with an obvious theft of that type, you can immediately call your bank to report the theft and block your bank account.

Despite a growing trend toward debit card skimming, industry officials say that we should keep this in perspective, since debit cards are still relatively secure.

“Of the 4 billion transactions conducted in a year, 99.99 per cent are processed without incident, so it really is a safe system,” says Tina Romano, a public relations manager with Interac Association.

Romano says there are a number of initiatives in place to prevent fraud and protect cardholders. Financial institutions use monitoring and detection systems to track suspicious transaction patterns. This often prevents fraud before it happens. Also, debit cards are now being upgraded to chip card technology in which, instead of swiping the card, a chip reader will process the transaction. This will make it much more difficult to copy and produce counterfeit cards. The chip transition is already in place and eventually the magnetic stripe transactions will no longer be accepted at point of sale terminals. Until then, however, some risk remains.

Normally, victims of debit card fraud are eventually reimbursed by the bank or credit union involved. But this is not always as straightforward as it sounds.

When investigating debit card fraud, your financial institution will ask a series of questions to confirm that you did not contribute to the unauthorized transaction. If you were negligent with your PIN or debit card, or liable for some other reason, your stolen funds may not be reimbursed.

If you've just banked your student loan, this could be especially messy. And even if you’re covered and don’t lose a cent, who wants to cope with frozen bank accounts and debit card fraud in the middle of project deadlines and exams?


Don’t be a victim. These simple tips can protect you:

• Memorize your PIN

• Never keep a written copy of your PIN near your card.

• Don’t select a PIN that is too easy to figure out, based on your birthday, address, phone number, social insurance number or family names.

• Never give your PIN to anyone else. If you suspect someone knows your PIN, just change it immediately.

• Shield your PIN during every transaction

• Try to use cash for higher-risk locations such as convenience stores and gas stations.

• Pay for self-serve gas at the pump instead of paying a clerk inside.

• At ATM machines, watch for possible hidden cameras or thieves looking over your shoulder. If you feel uneasy, go elsewhere.

• When using your debit card for transactions, avoid having your card swiped multiple times, as this would cause you to input your PIN multiple times as well. Immediately report to your bank any suspicious activity you notice with regards to your card. This would include a clerk swiping your card in two different machines.

• Closely monitor your account records. Some thieves steal small amounts over time, hoping you won’t notice. If you identify unusual activity, it’s your responsibility to notify your bank immediately.

• You’re responsible to immediately notify your bank or credit union if your card has been lost, stolen or retained by an ATM.

• When on-line banking, use virus protection and a firewall for secure access. Any wireless connection should be encrypted and password-protected from outside users.

• If you’re ever hit by debit card fraud and can’t resolve it with your financial institution, seek help from the Ombudsman for Banking Services and Investments (OBSI). You may also get assistance from the Financial Consumer Agency of Canada (FCAC)

  © Rodney Noriega 2009-2013


Learn More

For further tips on protecting your PIN, visit this Interac website page: