Interac Association reported today that Interac debit card fraud losses, as a result of skimming, are the lowest on record since 2003 - decreasing to $38.5 million in 2012 from a high of $142 million in 2009.
This represents 0.012 per cent of domestic Interac debit card volume and the lowest volume of fraud losses since data were recorded in 2003. Further, the number of cardholders reimbursed fell to 93,800 in 2012 from 238,000 in 2009. Cardholders are protected from losses under the Interac Zero Liability Policy*.
"Our multi-layer strategy to fight debit card fraud is producing significant results and continues to reinforce strong confidence in the safety, soundness and security of the world-class Interac system," said Caroline Hubberstey, Head of External Communications for Interac Association and Acxsys Corporation. "The ongoing conversion to chip technology is a vital tactic in our fraud prevention strategy, which is supported by other core elements that are critical to our continued success. These include valuable partnerships with law enforcement, financial institutions, acquirers, merchants and educational outreach to consumers."
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 across the country.
While there are different security methods that can be used to secure cards enabled with contactless technology and the associated transactions, Interac Flash only leverages secure chip processing, instead of magnetic stripe data type processing. This protects Interac Flash against skimming, counterfeiting, and transaction replay types of fraud, including electronic pick-pocketing where readers are used to capture information.
"As an enhancement of Interac Debit, Interac Flash leverages the security behind Interac chip de chip debit cards," said Hubberstey. "This results in comprehensive cardholder protections preventing criminals from capturing data on contactless cards through electronic pick-pocketing or other means."
At the end of January 2013, virtually all active Interac debit cards (99 per cent) and ABMs (99.6 per cent) had been converted to chip. Nearly 90 per cent of point-of-sale terminals (POS) had been converted. All POS terminals are to be converted by the end of 2015.