Using debit cards has become a way of life for many Canadians. In fact, Canadians are the biggest per capita users of debit cards in the world. Whether you’re withdrawing cash from an ABM, swiping your card to pay for this week’s groceries, or punching in your PIN to pay for a night at the movies, your debit card is a simple and convenient way to access your money.

Fortunately, protecting yourself from debit card fraud is pretty simple too. This month, we’ll address concerns you might have about debit card fraud and outline the easy steps you can take to protect yourself and your money. We’ll also tell you what to expect in the unlikely event you are a victim of this kind of fraud.

How Does Debit Card Fraud Happen?

To commit debit card fraud, a thief has to “skim” the information off the magnetic stripe on the back of your card. Typically, this is done by running your card through a separate card reader or putting a small reader over top of the reader on an ABM. The magnetic stripe contains limited, encoded information that allows the criminal to create a duplicate card, but the stripe does not include your account number or personal identification number (PIN). But the duplicate card is not enough to commit fraud, the thief will also need your PIN, which they usually get by watching you punch it into the keypad or by installing a small, pinhole camera above or to the side that records you punching in your PIN.

Your Bank is Working to Protect You

The first question many people ask when they learn about debit card fraud is “is it still safe to use my debit card?” The answer is absolutely yes. There are over 35 million debit cards in circulation in Canada and of those, 0.2%, or a fraction of a fraction, were affected by a debit card fraud incident in 2005, so the odds of becoming a victim are quite low. Fraud is kept to a minimum because the banks have sophisticated security and detection systems in place and teams of security experts to protect you. Banks also work closely with police and other groups, such as Interac Association and the manufacturers of ABM and point-of-sale machines, to keep the debit system safe.

You Are Protected From Losses

In the unlikely event that debit card fraud does occur, you will get your money back. When using your debit card, take comfort in knowing that you are protected by the Canadian Code of Practice for Consumer Debit Card Services, which guarantees that, if you are a proven victim of debit card fraud, you will get your money back from your financial institution.

How You Can Protect Yourself

Your bank has sophisticated security systems in place, but there are still important steps you can take to further protect yourself. One of these is preventing thieves from getting your personal identification number or PIN. If you lose your card or it’s stolen, it’s useless without your PIN, so make sure it’s kept a secret.

Here are few other tips to remember:

• use your shoulder or your hand to shield your PIN when entering it into the keypad,
• never lend your card or disclose your PIN to anyone else,
• memorize your PIN; don’t write it down,
• make sure your PIN can not be easily detected if your card is lost or stolen - don't use your birth date or address or part of your telephone number,
• if anything seems unusual about the ABM or point of sale terminal, don't use it; report the situation to police or your financial institution, and,
• review your monthly bank statements and report any discrepancies to your financial institution immediately.

What to Do if You are a Victim

If you are a victim of debit card fraud, you should contact your bank immediately. Your bank understands that being a victim can be upsetting and they will immediately look into the matter and get your money back as quickly as possible. They will block your card to prevent losses and will work directly with police on their investigation. Depending on the circumstances, the bank may ask you to sign an affidavit and either issue you a new debit card or ask you to change your PIN.

Use Your Card with Confidence

It’s important to know that your bank is working to protect you. Security measures are constantly being enhanced and technology is being upgraded. For example, Canadian banks and other debit card issuers are moving to integrate “chip cards,” where a small microcomputer contains the information on the card needed to complete transactions, which will eventually replace the magnetic stripe. This is an added level of security because the chip is extremely difficult to duplicate.

According to Interac Association, Canadians reached a milestone in 2004, using the Interac Direct Payment service 2.7 billion times. And 64 per cent of cardholders used their debit card at the ABM that same year. Debit cards are convenient, safe and simple to use and by incorporating the simple steps above, you can limit your chances of becoming a victim of fraud. So protect your PIN, contact your bank if you notice anything unusual with your accounts, and use your card with confidence knowing that your bank is working to protect your money.

For more questions and answers on debit card fraud, or to download the CBA’s free booklet, Safeguarding Your Money, visit the Fraud and Security section of the Canadian Bankers Association website. Our free consumer booklets are also available by calling 1-800-263-0231.

Canada’s banks take the issue of privacy, security and fraud prevention very seriously. They work hard to prevent their operations and customers from being used for any kind of financial crime and to raise awareness about the ways that customers can protect themselves.

As a consumer, you also have an important role to play in preventing fraud. This month, we’ll take a look at protecting yourself from debit card fraud.