Interac® debit card fraud losses fall to record low

Interac survey also shows that payment card security remains top-of-mind for Canadians

TORONTO, Feb. 25, 2015 /CNW/ - Interac Association reported today that Interac debit card fraud losses, as a result of skimming, are at a record low – decreasing 45 per cent to $16.2 million in 2014 from a previous low of $29.5 million in 2013.  More significantly, fraud exploitation within Canada accounted for only 20 per cent, or $3.2 million, of 2014 losses to financial institutions. Cardholders are protected from losses through Interac's Zero Liability Policy.

Also released today, results from a recent Interac survey shows that two out of five (41 percent) of Canadians are concerned about payment card fraud. Canadians are most concerned about fraud associated with skimming (49 per cent), retail data breaches (45 per cent), electronic pickpocketing (40 per cent) and online shopping (38 per cent).

"We know that payment fraud stories, such as skimming, electronic pickpocketing and retail data breaches are worrisome to people," said Mark Sullivan, Head of Fraud Risk Programs, Interac Association and Acxsys Corporation. "That's why we stay vigilant in the fight against fraud. We are debit experts and only want to provide payments solutions that allow people to access their hard earned money securely."

Interac Flash is a case in point. As an enhancement of Interac Debit, it has all the same security features, such as chip technology, Interac zero liability, plus the added protection of small transaction limits.  No single transaction can be more than $100 and the total spend can not exceed $200 before the cardholder must enter their PIN. 

"Criminals are looking for large amounts of cash and highly fenceable goods, not a few coffees," reinforced Sullivan. "Interac Flash is about speed and convenience for small value purchases but we know cardholders want security and that's why it offers strong protections, including protection from criminals attempting electronic pickpocketing to a lost card where someone tries to fraudulently spend $100."

With measures like the migration to chip technology, which is near complete in Canada, criminals are migrating their payment card fraud activity to international exploitation in non-chip environments and card-not-present (i.e., over the Internet and telephone) exploitation on credit cards and other networks' debit products.

"As our fraud numbers show, we have a steady decline of Interac debit card fraud losses since the introduction of chip and PIN technology in 2009," said Sullivan. "These investments in technology, along with our policies, sophisticated fraud prevention and detection efforts, and partnerships, have had a tremendously positive impact on the decline of Interac debit card fraud in Canada."

Top Payment Card Fraud Concerns:

• Skimming: One of out two Canadians (49 per cent) is concerned about skimming-related fraud. The Interac network protects consumers from skimming-related fraud through chip technology and comprehensive fraud prevention tactics. All ABMs and Interac debit cards have been converted to chip technology – and by the end of 2015, all point-of-sale (POS) terminals will be converted. To date, virtually all cards and ABMs have been converted and 96 per cent of POS terminals.
  
  
• Electronic pickpocketing: Two out five Canadians (40 per cent) are concerned about electronic pickpocketing. When Canadians use Interac Flash, they are safeguarded against counterfeiting and transaction replay types of fraud, including electronic pickpocketing. As a contactless enhancement of Interac Debit, it protects cardholders with layers of security, including chip technology and spending limits. No single transaction can be more than $100 and total spend without a PIN can not exceed $200. Once a limit is reached, a cardholder must insert their Interac debit card and enter their PIN for verification, i.e., conduct a regular Interac Debit transaction.  The limits are then re-set.
  
  
• Retail data breaches: Forty-five percent of Canadians are concerned about retail data breaches. Canadians should know that the Interac network is not susceptible to fraud from retail payment card security breaches, like those recently reported. Unlike credit cards and other debit card products, Interac rules do not allow the number on the front of the payment card to be used as an account number; it is only an identifier for Interac transactions. This means that any data captured or stolen through skimming or a breach is entirely useless to a criminal because it cannot be used to conduct transactions, online or in person. No personal financial information is ever shared or stored with retailers.
  
  
• Online shopping: Thirty-eight per cent of Canadians have concerns about shopping online. Although Canadians are most concerned about the fraud risks associated with online shopping, Interac Online uses unique, encrypted data – meaning the information cannot be duplicated and re-used for a fraudulent transaction. Since the transaction is completed through web banking, no personal information is ever shared with the merchants. These rules also protect cardholders from fraud resulting from payment card data security breaches, such as those recently reported in the media.

Notably, Canadians 35 and younger are less concerned about payments-related fraud. They cited skimming (34 per cent), online shopping (34 percent), electronic pickpocketing (32 per cent) and retail data breaches (32 per cent) as their top concerns.

In support of Fraud Prevention Month, Interac Association has created a webpage dedicated to raising awareness about payment card security and fraud prevention. For more information, videos and an infographic, please visit: www.interac.ca/security.

About the Survey Methodology
The omnibus survey was conducted by The Strategic Counsel among a representative sample of 1,000 adults (age 18 and over) across Canada. The survey was conducted online between January 19th and 23rd, 2015. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.

About Interac Association and Acxsys Corporation
A recognized world leader in debit card services, Interac Association is responsible for the development and operations of the Interac network, a national payment network that allows Canadians to access their money through Interac Cash at 65,000 Automated Banking Machines and Interac Debit at 879,000 point-of-sale terminals across Canada. Interac Flash, a secure contactless enhancement of Interac Debit, allows Canadians to pay for items instantly with their Interac chip debit card at a reader that supports Interac Flash.

Interac Association was founded in 1984 and is comprised of a diverse membership that includes banks, trust companies, credit unions, caisses populaires, merchants, and technology and payment-related companies.

Other related services offered by Acxsys Corporation, whose shareholders are the architects of the Interac network, include: Interac Online, for secure online payments made directly from a bank account; Interac e-Transfer^®, for the transfer of money from one person's bank account to another person's bank account using an email address or mobile phone number for notification; and international services, which provide Canadian cardholders with point-of-sale access at nearly 2 million U.S. retailers, and PULSE, Discover, Diners Club International and UnionPay cardholders access to ABMs in Canada.

Interac, the Interac logo, Interac Flash, Interac Debit, Interac Online and Interac e-Transfer are trade-marks of Interac Inc. Used under license.

* All Interac cardholders are protected from losses resulting from circumstances beyond their control under the Interac Zero Liability Policy.  See your financial institution for details.

SOURCE Interac Association

Image with caption: "Interac debit card fraud losses on a steady decline since 2009, for a record low in 2014. (CNW Group/Interac Association)". Image available at: http://photos.newswire.ca/images/download/20150225_C6067_PHOTO_EN_12508.jpg

Media contact: Interac Association and Acxsys Corporation, [email protected], 416-869-2017