Interac Association has announced that Interac debit card fraud losses to financial institutions resulting from skimming declined to $70 million in 2011 from $119 million in 2010 and a high of $142 million in 2009. The number of cardholders reimbursed fell to 154,170 from 205,200 in 2010 and 238,000 in 2009. This represents 0.0229 per cent of domestic debit card volume and the lowest volume of fraud losses since data were recorded in 2003. All Interac cardholders are protected from losses resulting from circumstances beyond their control under the Interac Zero Liability Policy.
“Our collective efforts and significant investments in the fight against debit card fraud, particularly the transition to chip technology, are producing tangible benefits,” said Caroline Hubberstey, Head of External Affairs, Interac Association. “The transition to chip technology is all about making a safe system even more secure and that is what’s happening. While significant progress is being made, the fight continues and no one is resting on their laurels.”
Chip technology is both secure and smart. It gives the card the ability to store and process data securely. Unlike a magnetic stripe, this processing power makes it extremely difficult to copy and reproduce. This processing power is used, together with cryptography to allow the card and terminal to communicate with one another to carry out security checks to ensure the card is valid. Chip technology also enables advancements like Interac FlashTM, which is currently being rolled out.
Interac Flash, the contactless enhancement of Interac Debit, leverages EMV-based secure chip processing, instead of magnetic stripe data type processing. This protects Interac Flash enabled cards against skimming, counterfeiting, and transaction replay types of fraud, including electronic pick-pocketing where readers are used to capture information.
“Security is of paramount concern for us,” emphasized Hubberstey. “By also choosing to leverage chip technology for Interac Flash enabled debit cards, we have taken strong steps to protect cardholders from tactics that criminals are using to capture data on contactless cards, such as electronic pick-pocketing.”
Under Interac rules, card-not-present transactions and fallback to the magnetic stripe are not permitted. Further, given the structure of Interac Online, Internet shoppers can make secure online debit purchases directly from their bank accounts, without the need to provide any personal financial information, including card and account numbers, to online merchants. Stolen Interac debit cards and even PINs cannot be used to complete Internet transactions.
Interac chip debit cards and terminals are currently rolling out across Canada. By the end of this year (2012) all Automated Banking Machines (ABMs) and Interac debit cards will be converted to chip technology and by the end of 2015, all Point-of-Sale (POS) terminals. In many cases, conversion is ahead of schedule. As of the end of 2011, 90 per cent of Interac debit cards and 84 per cent of terminals (ABMs/POS terminals combined) had been converted.
In support of Fraud Prevention Month, Interac Association, a member of the Competition Bureau’s Fraud Prevention Forum, has created an infographic that highlights the numbers above and also provides further insight to consumers around the security of Interac debit card transactions using chip technology. The organization will also host a Fraud Prevention Month Open House on their Facebook wall on Wednesday, March 14th at 7:00PM EST.