Winnipeg debit card skimming scheme affects hundreds of credit union customers

5 February 2015

In mid-December 2014, clients of several major credit unions in Manitoba began to notice that money had been withdrawn from their accounts without permission. After further investigation, authorities have come to believe that the missing money was a result of a sizable debit card skimming scheme. Most of the affected customers were in the Winnipeg area, but customers from all across Manitoba were affected as well.

Debit card skimming schemes are a remarkable form of fraud in that they make use of actual physical devices to steal information on-site, rather than relying on online hacking. Skimmers insert tiny card readers inside the readers at ATMs, which collect the data stored on the card without the ATM user suspecting anything is wrong. Sometimes this is accompanied by the placement of a tiny spy camera within the ATM space where it can record users entering their PINs so that the skimmers can enter them later. Despite the risk associated with entering a bank and physically altering an ATM, debit card skimming is thought to be one of the most common causes of financial losses from fraud.

News of the skimming scheme was brought to light for the broader public when Southdale MLA Erin Selby tweeted that her entire bank account had been emptied from an ATM in New York City and encouraged other members of Canadian credit unions to check for suspicious activity on their accounts. In the aftermath, hundreds more Manitoba residents learned that their accounts had been accessed as well, including members of Assiniboine, Cambrian, Carpathia, Crosstown Civic and Belgian Alliance credit unions.

The affected credit unions have promised to repay members for their losses, but for some members, the skimming scheme still put a strain on their lives and finances. Especially for students, the effects of the sudden loss of a large amount of money can be immediate and harsh. University of Manitoba student Chris Moskal had more than $700 drained from his account.

“It was kind of a bit of a punch in the gut, because I’m in school right now and I can only work one or two shifts a week,” he said in an interview with the CBC. “So, $700 is …↑quite a few paycheques that have added up over this semester. I’m in the middle of exams right now so I want this to go away. I don’t really know what else to do.”

Officials are interpreting the scheme as a targeted attack during the holiday shopping season, when more people than usual use ATMs to withdraw money from their accounts to buy gifts or send cash to relatives. Signs point to the crime originating in New York, since that was where the money was withdrawn.

Credit union employees recognized that the scam came at one of the worst possible times for consumers. Assiniboine Credit Union spokesman Gerry Campbell told the CBC, “This time of the year, particularly with people looking to go Christmas shopping, lots on the go, and then to have this happen, it’s really unfortunate.”

However, there is some good news on the horizon for customers of Canadian credit unions. Debit card skimming schemes are much harder to execute on cards that use microchips for information storage, since the information is not stored on the card itself. Last year, not all retail establishments had chip-compliant card readers, but they will be required to do so in 2015, meaning that transactions using debit cards will be safer than ever in Canada.

To protect yourself against harm to your credit score in the case of debit or credit card fraud, consider signing up for a credit monitoring service.