Portable credit card terminals used in fraud
When you pay a restaurant bill at your table using a point-of-sale machine, are you sure it’s legit?
In the past three months, Toronto and Peel police have discovered many that aren’t.
In what is the latest financial fraud, crooks are using distraction techniques to replace merchants’ machines with their own, police say.
At the end of the day, they create another distraction to pull the switch again.
Using information inputted by customers, including PIN data, the criminals are reproducing credit cards at an alarming rate.
Merchants must be wary this is going on and train their staff, police told reporters Thursday.
One way to tell if a machine is fraudulent is if a credit card can be pushed in so far that you can’t easily put your thumb on the end of it.
That might indicate the machine is reading the card’s magnetic stripe and recording your data.
“The only data that is capable of being compromised to our knowledge is the data associated to magnetic strips,” said Det. Ian Nichol. “The industry is taking steps to minimize this.”
At some point, all point-of-sale terminals will be switched over to accept only chip cards, police say.
Transactions at many smaller retail locations still use only magnetic stripe technology.
Nichol advises retailers to check their terminals at the beginning, middle and end of a shift and ensure the number on the machine is the same.
The crime has turned up in Toronto, Peel and Montreal, police say.
A few weeks ago, a store owner in a Toronto food court alerted police to suspicious activity with his point-of-sale machine.
The Financial Crimes Unit conducted surveillance and arrested a man in the act, police say.
Staff Insp. Bryce Evans, with the Financial Crimes Unit, said he believes money gained from financial crime is likely going to terrorist or other criminal organizations outside the country.
In many such cases, he said, arrests are made in scrubby houses or apartments, not the luxurious homes of people expected to be profiting alone from the crime.
Although perceived as a victimless crime because the banks are on the hook for losses, police argue this fraud costs everyone because financial institutions must spend money on high security.
In another disturbing trend, police say financial crime has now surpassed drugs in value as the leading crime in Canada.
Evans said a recent survey found people are more concerned about financial crime than any other.