In the last week, police in Quebec have made a number of arrests in a sophisticated debit card cloning scam. The scammers had modified point of sale devices installed at more than 40 stores in the Montreal area which captured and kept card data and PINS. Cloned cards could be created with the data and the fraudsters can then clean out the victim's accounts at the nearest ATM.

One of the people arrested works for a POS company, so the devices looked completely legit.

Cops crack debit card fraud ring:

Published: Tuesday, June 20, 2006

Nine people, including an employee of a subcontractor of a major financial institution, were arrested Tuesday morning as police dismantled what they described as a very sophisticated debit card fraud ring.

The ring is alleged to be tied to a Montreal-area street gang but was highly sophisticated and well connected. More than 100 SQ officers participated in Tuesday’s raids. Besides the arrests they executed 10 search warrants, seizing computers, electronic equipment and cash.

“The way that they proceeded was that they would give money to a cashier in a dépanneur or a store,” said Sûreté du Québec spokesperson Constable Chantal Mackels.

“They would then install their own equipment in the store. When you would pass your debit card in the machine you wouldn’t think anything was wrong, but it would record all the information on your debit card. But also it would record your PIN. They didn’t need someone to look over your shoulder to find out your number.”

Mackels said that among those arrested was someone described as an “inside person” who worked for a subcontractor to Mouvements Desjardins, a financial co-operative. The person is alleged to have supplied client information to the fraudsters, in particular their dates of birth.

Mackels said Desjardins ATMs request that clients enter their dates of birth when making withdrawals.

The investigation began in March after the SQ's financial crimes division received a complaint from the Mouvements Desjardins. “They told us they were the victims of a fraud of a couple of million dollars,” Mackels said.

“Every year millions of dollars are stolen because of identity theft or fraud. It gives a sense of insecurity to people. That’s why we hit hard on these organizations and unfortunately it takes a while to investigate them.

“They’re always evolving and so do we.”

The people arrested are expected to appear in court Wednesday to face charges of fraud and conspiracy to do the same.

There's more coverage here:

• 100 officers bust debit card fraud ring Metro Toronto, Canada
• Nine arrested in debit card fraud ring National Post
• One hundred officers bust debit-card fraud ring in Montreal; nine ... Calgary Sun
• High Tech Debit-Card Fraud Ring Busted in Montreal 580 CFRA Radio
• Cops crack debit card fraud ring Montreal Gazette, Canada
• Fraud artists keep up with latest technology CBC Montreal

Labels: identity theft, privacy