On Tuesday this week my local ASB branch phoned to say that my replacement VISA credit card had arrived. That was a surprise, because I was not expecting to receive a new credit card. Had I missed something in the mail? When I collected the card from the bank I was told that it had been proactively replaced due to a "heightened risk of fraud". Fraud? In my line of work, that is a word that gets your attention!
The following day news broke of a problem at Auckland City Council car parks that had resulted in credit card information being captured by unauthorised persons.
Magnetic swipe cards of the type used for credit, debit and ATM cards can hold up to three "tracks" of data. One track is read when the card is swiped through or inserted into a machine. The track contains details of the card, more information than the card number and expiry printed on the card. Reading the track is supposed to prove that the card was actually present when the transaction occurred, as opposed to "card not present" transactions like Internet and telephone purchases.
According to one bank I spoke to the perpetrators had captured the tracks from cards used in machines at Auckland City car parks. Normally this indicates that "skimming" had occurred, where the track is read by an unauthorised device attached to the machine such that the card passes near to or through it. However it is not the case that skimming is the only way this could have happened. Sometimes these machines record the track data to a log in a raw form for debugging purposes. If that happens, a (near) duplicate card can be reconstructed from the logged data.
Although it has to be said that there is still much confusion over what really happened. Another bank issued a statement that appeared to confirm that skimming had occurred. A payments industry source who telephoned me stated the opposite.
Protecting Against Credit or Debit Card Fraud
Your best protection against credit or debit card fraud is YOU. Check your credit card statement carefully each month and promptly dispute any charges that you don't recognise. It's harder with debit cards, because the transactions appear on your bank statement and funds are taken from your account right away - but you should check those transactions just as carefully. Promptly raise a dispute over any suspicious charges. Your bank or credit card issuer will suspend the transaction until the dispute is resolved.
Beware of the information printed on credit/debit card receipts, particularly the older style zip-zap manual machines. Treat receipts as carefully as you would the credit/debit card itself, and that includes the newer computer printed receipts. Complain if you use your card at a merchant and the receipt shows more than four digits of your card number.
And of course - choose a good PIN and don't write it down. Generally banks will wear the cost of any fraudulent transactions, unless you have contributed to the problem through your own carelessness.
Debit Cards
Debit cards require extra care because the money comes straight out of your bank account when the transaction takes place - there is no bill for you to review and pay.
I suggest that you should set up a special account (suffix) at your bank and use that for debit card transactions. Transfer into that account whatever money you intend to spend on the debit card in the near future. That way, if fraud occurs or a merchant tries to charge you more than you expected you have a level of protection.
