New credit card safeguards
Swipe and you've paid for a haircut and pedicure.
Swipe again and you've booked a vacation. Outstanding dental bill?
No problem, just swipe and your balance is back in the black.
But, as Canadians continue our love affair with plastic,
criminals continue to come up with new methods of fraud -- everything
from installing phony devices on ATMs to using cell phone cameras
to produce counterfeit credit cards.
The answer? Cards with computer chips that can be
programmed to eliminate counterfeit almost entirely and re-programmed
to keep one step ahead of the fraudsters who keep looking for ways
to get around the card's security.
"Chip (technology) is a quantum leap over magnetic
stripe technology," says Mike Bradley, vice president of new
products and platforms for VISA Canada. "It's a secret set
of keys inside the chip that make it virtually impossible to copy.
And the information's not static; it can be changed if we need to."
Technology slow in coming to
Chip cards were first announced in Canada by VISA and MasterCard
in 2003, several years behind Europe and parts of Asia. That explains
why the first Canadian card to carry the chip is RBC's Avion Visa.
Essentially a travel reward card, Avion cardholders can benefit
from chip security while abroad, but not yet at home since banks
are some years away from having the supporting infrastructure in
place, in Canada. Tim McGaugh, RBC program manager, reports that
a few merchants have the chip technology today, so the rollout has
begun on a small scale.
"Canada did not move as quickly as some parts
of Europe or Asia," says Catherine Johnston, president of the
Advanced Card Technology Association, which advocates for smart
card technology. "We are in the middle, but that means we can
learn from what other countries have done. And we are moving well
ahead of the U.S., (which) hasn't even started to move to chip."
Johnston says that because the chip is computerized,
it can store sophisticated identifying information such as biometrics
(eye scans, fingerprints, etc.,) that make it more fraud-proof.
It can be programmed to ask the holder questions and information
can be added or changed to keep it safe down the road.
"Magnetic stripes were introduced 45 years ago
to enable us to do something. They were never designed to allow
someone to impersonate you, but that's what has happened with that
technology," Johnston says, calling the magnetic strip static
technology that can't be programmed like a chip.
Some privacy concerns
Toronto security expert Peter Hope-Tindall, of dataPrivacy Partners
Ltd., agrees that chip technology can safeguard identify and reduce
fraud. But he cautions that consumers need to think about privacy
issues along with the enhanced security. "People need to ask
what information is being collected with chip, and what's being
done with this information. Read the fine print in your agreement,
and ask questions," he says.
In the future, he says, people will have chip readers
on home phones and computers -- no more giving out your card number
over the telephone when ordering concert tickets.