How Can I Protect Myself from CIBC Debit Fraud Through Online Purchases, Mail Order or Phone Purchases?

We have an old chequing account at CIBC which is useful for shifting money into and out of our CIBC Investor’s Edge brokerage accounts. For years, I had a simple “Convenience Card” which I could use at the CIBC bank machines to make deposits and withdrawals. A year or so ago, though, a replacement bank card came in the mail. It’s called an Advantage Debit Card and is branded with both the VISA and the Interac logos.

Why I Disabled the Interac Flash Payment Option on This CIBC Advantage Debit Card

When I first received the card, I saw it had the Interac Flash logo. That bothered me because I never make debit purchases from this bank account. I’m not quite sure whether the Flash and Tap cards are easier for fraudsters to get data from although I’ve read stray comments that suggest they may be somewhat vulnerable.

Given that I never intend to use this option, I asked the service representative at my CIBC branch to “turn off” the Tap option used for Interac Flash. According to the flyer that came with the card, you can also phone the main CIBC number and ask to have the Flash or Tap feature disabled.

So that seemed good and I tucked the card away to use at the bank machine.

Why You Should Read Those Letters That They Mail With Your Bank Card

Imagine my surprise when almost a year later, desperate for something to read within reach of the telephone while waiting on hold because my call “is important” I browsed through the cover letter that I got with my CIBC Advantage Debit Card.

The letter states
“Your CIBC Advantage Debit Card details (for example, card number and expiry date” may be used to make debit purchases online, by phone or by mail order without a PIN or the card being present.” “….you could be liable for losses.”

Say what?!

Don’t they need a PIN or at least the security number off of the back of the card to use it to make a debit purchase?


What I Did to Protect Myself from Fraudulent Theft Using My CIBC Debit Card

I phoned in to CIBC to ask them how I could prevent purchases made
“online, by phone or by mail order” without a PIN or the card being present.

Unfortunately, they couldn’t simply turn off those three types of sales.

What they could do was block the use of the card for any and all purchases. In other words, remove the ability to use the card for debit of any kind other than a bank withdrawal from the bank machine or from the teller.

They did this by setting the limit for purchases to $0.00.

Because I will not be using this card as a debit card, I was happy to accept this solution.

What I’d Like CIBC and the Other Banks to Consider

That said, I’d like CIBC and all banks to consider just how weak the security is around this type of card. Given how they have invested heavily in a Chip and PIN technology, it seems bizarre to go back to having anyone who physically steals the card being able to make purchases using it. In fact, anyone who can “borrow” a card long enough to scribble down a few numbers could use it illegally. I know we are supposed to guard our cards endlessly, but I suspect many wallets get left unattended for a few minutes at a time, particularly in large secured offices.

In the meantime, if you have one of these cards and you don’t intend to use it for any debit purchases, consider turning it off. It’s one less thing to have to be paranoid about.

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Do you have more than one debit card? Have you got Tap, Flash and online debit enabled on all of them? What steps do you take to keep your money safe? Please share your experiences with a comment.

Is Investing In GICs More Risky Than Investing in the Stock Market?

I never have heard anyone say that investing in guaranteed investment certificates, or GICs, is more risky than investing in shares of companies in the stock market, but now I’m beginning to wonder if it’s true?

Why Does It Seem Investing in GICs Might Be Risky and Make Me Lose Money?

First, I’ll clarify that I’m not actually worried about losing any money—but other people seem to be.

I have part of our emergency fund money invested in 1-year-term GICs with Oaken Financial. Each month, 1/ 12 of that money is invested in a new 1-year GIC just after the previous year’s GIC matures. That means if interest rates ever start to go up, I should gradually be re-investing at a higher rate. We chose this procedure because we knew that if we needed our emergency funds to pay our bills, we would only need a steady stream of money each month, not one big lump sum of money.

Oaken Financial has been very good to work with. Their telephone support is courteous and prompt. They send me a letter confirming each GIC purchase and a free monthly statement for our high interest savings account. It’s quick and simple to buy my GICs online and to transfer money in and out of our savings account.

Are My GICs at Oaken Financial at Risk?

The problem isn’t directly with Oaken Financial. The problem is that the company that owns them is having some legal and financial difficulties. They may have loaned money in the form of mortgages to people who were not honest about the value of the properties, if I understand it correctly.

That means the company that owns them is at risk. Right now, many investors are selling their shares in the company. Some small investors with cash deposits with Oaken and Home Trust are also withdrawing their savings.

It’s kind of like that scene in the movie It’s a Wonderful Life where everyone tries to take their money out of the Savings and Loan business at the same time. The business could fail because of a lack of faith.

However, my GICs are Oaken Financial are not at risk. They are insured by the CDIC. I checked before I bought them. So if something happens to the company, my money will be re-paid by insurance. I’m sure that would not happen instantly and there would be paperwork but I’m also sure it would happen eventually.

Will I Keep Buying GICs from Oaken Financial?

Recently, to encourage people to keep their cash at Oaken, they have increased the rate they offer on GICs.

Since I was planning to re-invest our next maturing GIC in May in for a new one year term, I will be doing just that. It’s still CDIC insured. And I am hopeful they may weather this storm. If not, they will likely be purchased by another financial institution and life will go on. Either way, I have no concerns I will lose our money.

Should I Try to Get My Money Out of my GICs at Oaken Financial?

Only you can tell what is best for your finances. Discuss your options with a financial advisor. Talk to CDIC and Oaken about your concerns if you want. I can’t tell you what you could or should do.

Personally, I’m going for a nature walk.

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Do you remember when Canada Trust was not part of TD? Please share your memories of other trust company takeovers with a comment.