Pay heed to possible debit card downside
www.globeandmail.com By JUDITH TIMSON Saturday, February 22, 2003 - Page B2 Closing Markets
Friday, Feb. 21
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The day I stopped worshipping at the altar of convenience was the day our son came home with the shocking news that his bank accounts had been emptied out in a debit card scam. A careful money manager, he still had his card tucked safely in his wallet, the PIN number known only to him. But that didn't stop it from being copied while he made a purchase, and then used in a series of transactions that took place in Venezuela, of all places.
"Been travelling lately?" asked a puzzled teller when he went in to inquire about his account. He was lucky. There was no way any bank official or fraud squad gumshoe could believe that a 17-year-old who demonstrably had been in chemistry class in Toronto had engineered those transactions. He also had parents who were aggressive in calling both police and bank officials. All his money was quickly reinstated.
Still, it felt like a spooky international caper movie, one in which none of us wished to star. And it changed our minds about the casual use of debit cards to make purchases.
Canadians are the most frequent users of debit cards "in the universe," according to one bank official, with close to 2.5 billion transactions a year. One Interac official said: "People can leave home with their keys and their banking card and know they don't have to worry about anything else."
Oh yeah? While banks are loath to release figures about how much debit card fraud is going on, they do admit it's enough to be worried about, and it's growing. Police have no difficulty calling it an epidemic. In most major cities, in places as varied as pizza outlets and gas bars, arrests have been made in debit card scams, most of which involve using fake equipment to copy cards and PIN numbers.
But we don't really want to think about this, just as we don't want to think about credit card fraud, or identity theft in general. It's too unsettling. It gnaws at our sense of security; it cuts into our fast-paced lives. It erodes even our pride in progress. Paranoids might characterize it as a technological footrace between the dark forces and the light -- as fast as we come up with ways to make our financial transactions quicker and easier, the bad guys are right behind us, coming up with ways to steal our money.
Just last week, a company in Omaha admitted that a hacker had gained "unauthorized" entry to millions of credit card numbers -- some of which may be held by Canadians -- and these accounts are now at risk. Philippa Lawson is legal counsel for the Public Interest Advocacy Centre in Ottawa, which is preparing a report on all identity theft -- the unauthorized use of personal information, which includes debit card fraud. Ms. Lawson says that while she's never heard of a debit card case in which people don't get their money back, it is still "a disaster for the people it hits -- it totally turns your life upside down."
Even well-informed, diligent consumers are not aware they could be on the hook if they cannot prove fraud. Banks and other institutions only voluntarily honour a code of restitution. Police and financial institutions are issuing security advisories urging consumers to beware of shoulder-surfing, and even to change their PINs if they've had the same one too long. But Ms. Lawson says it's unreasonable to tell consumers to change their numbers frequently. "How many passwords can the human brain remember?"
The truth is, we don't want to change our lives. We want the big easy, and we're prepared to put up with what we still consider the remote possibility of being robbed in exchange for the ease of transaction. Still, the onus is on the consumer to be vigilant at cash machines or in stores. A clerk should never be allowed to swipe a debit card beneath eye level, or even swipe it twice; when a card is in play, the owner should never take his or her eyes off it.
It's also up to the card owner to note not only account activity but lack of activity. If a purchase did not go through, it may mean a fake machine was used, and a PIN could be in peril. It sounds dire. "But think back years ago," says Sara Feldman, a spokeswoman for the Interac Assocation. "Back then you could go to the bank, take out $30 and be mugged on the street. You'd never get that back."
There's always some consolation. judithtimson@hotmail.com