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Overview
At the end of fiscal year 2005, approximately 56.4 million
credit cards were in circulation across the country, with a sales volume
exceeding $190.6 billion (MasterCard and Visa).
Payment card counterfeiters are now using the latest computer devices
(embossers, encoders, and decoders often supported by computers) to read,
modify, and implant magnetic stripe information on counterfeit payment
cards.
Phoney identification has been used to obtain government assistance,
personal loans, unemployment insurance benefits and for other schemes
victimizing governments, individuals, and corporate bodies.
Payment Card Partner Losses by type 2005 |
Category |
$ Loss |
No. of accounts |
$ Avg. loss per account |
Lost |
$14,771,080 |
25,363 |
$586.75 |
Stolen |
$26,112,623 |
40,827 |
$638.86 |
Non receipt |
$7,856,411 |
3,803 |
$2,041.71 |
Fraudulent applications |
$8,909,580 |
4,872 |
$1,733.24 |
Counterfeit |
$126,824,292 |
114,795 |
$1,050.02 |
Fraudulent use of account |
$88,364,181 |
147,911 |
$595.86 |
Miscellaneous, not defined |
$7,305,414 |
5,069 |
$1,496.07 |
TOTAL |
$280,143,582 |
342,640 |
$798.00 |
CATEGORIES OF CREDIT CARD FRAUD
The criminal use of credit cards can be divided into the following categories:
- Counterfeit credit card use: This represents the largest category
of credit card fraud, involving Canadian issued cards, with 37% of all
dollar losses. Organized criminals have acquired the technology that
allows them to "skim" the data contained on magnetic stripes, manufacture
phony cards, and overcome such protective features as holograms.
- Cards lost by or stolen from the cardholder: Lost and stolen cards
represent 23% of all card fraud losses. Typically the cards are stolen
from the workplace, vehicles, health clubs, golf clubs, etc.
- Fraud committed without the actual use of a card (no-card fraud):
No-Card Fraud accounts for 10% of the all losses. Deceptive Telemarketers
and now fraudulent Internet Web Sites obtain specific card details from
their victims, while promoting the sale of exaggerated or non-existent
goods and services. This in turn results in fraudulent charges against
victims' accounts.
- Fraud committed on cards not received by the legitimate cardholder
(non-receipt fraud): Non-Receipt Fraud where cards are intercepted prior
to delivery to the cardholder account for 7% of all losses. Losses attributable
to mail theft have declined as a result of "card activation" programs,
where cardholders must call their financial institution to confirm their
identity before the card is activated. In 1992 this category accounted
for 16 % of the losses.
- Cards fraudulently obtained by criminals who have made false applications:
Fraudulent Applications involve the criminal impersonation of creditworthy
persons in order to acquire credit cards. Although false application
losses represent only 4% of all losses, the numbers are increasing
Tips
Follow these tips to protect your money and your credit and bank cards
against fraud and misuse. Your ABM/debit card is the key to your account(s).
It is for your personal use only.
- Keep your card in a safe place and never 'lend' it to anyone. Conducting
an ABM or debit transaction requires both your access card and your
Personal Identification Number (PIN).
- Protect your PIN, it is your electronic signature. Don't write it
down - memorize it.
- When selecting a PIN, always avoid the obvious - your name, telephone
number, date of birth, and address.
- Never disclose your PIN to anyone. No one from a legitimate financial
institution, police service, or business should ask for your PIN.
- Always conduct your ABM transactions when and where you feel most
secure. If you are uncomfortable about using the machine for any reason,
do it later or go to another location.
- To ensure privacy, use your hand or body as a shield to prevent others
from seeing you enter your PIN.
- After completing a transaction, remember to take your card and your
transaction record.
- After making a withdrawal from an ABM, count the cash received and
put it away immediately.
- If your card is lost, stolen, or is retained by an ABM, notify your
financial institution immediately. Most institutions offer 1-800 telephone
numbers and/or 24-hour service for lost or stolen cards.
- Robbery rarely occurs at ABMs, but if it does happen, remember that
your safety comes first: Cooperate with the robber and then report the
incident to the police and your bank.
Source: Safe Guarding Your Money
Canadian Bankers Association (October 2000)
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