22 March 2019

Fraud awareness a priority as credit and debit card use continues to rise

Businesses must protect themselves and their customers

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Canadians charged $4.9-billion to their Visa and Mastercard credit cards in 2017, an increase of 122 per cent from 10 years earlier, according to the Canadian Bankers Association1 (CBA). The number of cards in circulation was up 16 per cent to 73.4 million and the number of merchant outlets accepting the two cards increased by 46 per cent to 1.7 million.

But in spite of the widespread use of credit cards, and the increasing popularity of smart phone apps such as Apple Pay, Samsung Pay and Android Pay linked to credit cards, many Canadians are still worried about the security of these technologies.

The latest fraud survey2 by CPA Canada found that 68 per cent of respondents believe electronic payment methods, such as tapping debit and credit cards or using smartphone apps, facilitate fraudulent activities. Forty per cent feel uncomfortable buying online, and 35 per cent report being a victim of financial fraud at some point in their lives, with credit card fraud (75 per cent) and debit card fraud (25 per cent) being the top two types of fraud listed.

Banks and credit card companies take credit card fraud very seriously, and have highly sophisticated security systems and teams of fraud experts in place to monitor transactions, protect customers and prevent and detect credit card fraud.

Security measures are constantly being enhanced and technology is being upgraded to prevent fraud, including the use of chip technology for debit and credit cards. These cards use a technology called “cryptography” that allows the card and the store terminal to communicate with each other during the transaction and carry out security checks to ensure the card is valid.

The microchip is state-of-the-art in payment card technology and is extremely difficult to duplicate. The transition to chip-based technology rolled out successfully and, in Canada, all debit cards and ABMs and most store terminals at retailers are now capable of chip transactions.

While Canada’s banks have sophisticated security systems in place to prevent credit and debit card fraud, you can also minimize risk and protect yourself by:

  • Protecting your PIN
  • Inserting your card first instead of swiping when making a purchase. If the store terminal isn’t chip capable, it will prompt you to swipe
  • Never lending your card or disclosing your PIN to anyone else
  • Memorizing your PIN; don’t write it down
  • Making sure your PIN cannot be easily detected if your card is lost or stolen
  • Regularly reviewing your transaction history online or on your bank statements and reporting anything unusual to your financial institution immediately
  • Changing your PIN periodically

Interac3 offers the following tips to help merchants protect themselves against debit card fraud:

  • The customer is responsible for inserting their debit card into the terminal and entering their PIN
  • The customer is responsible for making an Interac Flash transaction – the merchant can verbally assist by directing them to hold their card or mobile phone above the PIN pad
  • Treat your PIN pads like cash; keep them out of sight when not in use
  • Check your PIN pads and Automated Banking Machines regularly for anything unusual
  • Lock-up PIN pads at closing
  • Include log-in sheets for accountability of PIN pad in cash open and close procedures
  • Consider adding surveillance cameras
  • Know your employees – exercise due diligence when hiring and check references
  • Remind your customers to protect their PIN when entering it at every opportunity and take their card when the transaction is complete
  • Talk to your payment service provider about other steps you can take to prevent fraud from happening at your location.

Disclaimers

Please note the following with regard to certain products which may be discussed in connection with these materials:

For all HSBC products, certain terms and restrictions may apply and the products are offered subject to applicable terms and conditions.

Certain of the products and services offered by HSBC and its subsidiaries and affiliates are subject to credit adjudication and approval. Not all products and services offered by the HSBC Group are available in all jurisdictions in which the HSBC Group operates.

Unless governing law permits otherwise, you must contact an HSBC Group member in your home jurisdiction if you wish to use HSBC Group services in effecting a transaction in any investment or product mentioned in this communication.

Issued by HSBC Bank Canada (“HSBC”)

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