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

The use of credit and debit cards continues to rise as Canadians move away from cash in favour of contactless payment methods.¹ However, consumers must remain vigilant when choosing where to swipe their credit and debit cards.

As the world of in-person shopping evolves, there is a growing need for new financial technology that makes it effortless to use your smartphone to buy, invest and save. While providers of these services make protecting their customers and their personal information a priority, as with all technology platforms, they’re vulnerable to hacking and abuse.

A 2022 survey² revealed that nearly half of Canadians had experienced financial fraud, with credit card fraud being the most common. This makes it very important to review your finances and track your banking and credit card transactions at least once a month. It’s also a good idea to set up text or email alerts for new transactions, which can help catch unauthorized behaviour almost immediately.

While there are many sophisticated security systems in place to prevent credit and debit card fraud, there are additional steps you can take to minimize risk and protect your banking information from being compromised:

• Protect your PIN when making a purchase in store and online.
• Insert your card in the terminal first before swiping when making a purchase. If the store terminal isn’t compatible with chip technology, it will prompt you to swipe.
• Never lend your card or disclose your PIN to anyone.
• Memorize your PIN; don’t write it down.
• Make sure your PIN cannot be easily detected if your card is lost or stolen.
• Regularly review your transaction history online or on your bank statements and reporting anything unusual to your financial institution immediately.
• Change your PIN periodically.

Be judicious about which websites you purchase from and avoiding storing credit card information online outside of your financial institution. For merchants, Interac³ offers the following tips to protect 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.
• 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.

Just as for customers, for businesses avoiding payment fraud means being ever vigilant. There are a few common tactics fraudsters use that businesses should pay particular attention to:

• A sense of urgency is often used to disguise fraudulent payment requests. If you receive a request from a customer or partner demanding payment immediately, take the time and steps needed to verify the request’s legitimacy.
• Unexpected changes to payment information, location or timeline can be a tipoff that something may not be right. Typically, a customer or partner you have a longstanding relationship with will altert you well in advance to these types of changes.
• Unexpected changes in communication methods or documentation are also a sign to be extra cautious.

It takes a collaborative approach from both consumers and merchants to mitigate the risk of fraud. This includes making sure businesses are investing in the right data security tools, and consumers are encouraged to exercise vigilance and maintain a watchful eye on their personal finances to spot any suspicious purchases.