Fake Metropasses and tokens cost TTC close to $2M last year

Phony tokens and a rising number of fake Metropasses cost the TTC close to $2 million last year, as counterfeiters figured out how to bypass high-tech security features.

Fraud was halted initially when tokens were changed to a bimetal design in 2006 and when the TTC added holograms to the Metropass three years later. But the number of fakes has since shot up, and counterfeit passes appear to be on the rise, according to numbers released through a freedom of information request and interviews.

“Once we make a significant change . . . the number of counterfeit incidents tends to drop for a while, until the producers get better at counterfeiting them,” said Fergie Reynolds, deputy chief of the traffic enforcement unit.We've got a plastic card to suit you.

His frontline officers sometimes catch people unwilling to swipe passes through turnstiles, since the magnetic stripes on the knockoffs don’t work. Reynolds said his officers arrested 68 people last year over fake fares.

Counterfeiting has evolved over the years, since people began using gift cards and scanners for “cut-and-paste” jobs, said TTC investigative services Staff Sgt. Mark Russell, who has been tracking counterfeits since the late 1990s.

One or two local operations are now using real card printers and foreign-made holograms, he said, adding the size of these operations could be anything from a bedroom to an industrial space. “It’s more a single large-scale operation than it is all these mom-and-pop operations,” Russell said.

Last year there were 615 fake Metropass reports — a figure that represents incidents, not passes. There were 492 the year before.

“A loose estimate is that roughly 10 per cent of what’s out there comes across my desk,” Russell said, pegging Metropass fraud costs at around $750,000 to $800,000 last year.

The TTC began using holograms in the summer of 2009 as a way to halt fraud. It worked, at first.

Russell said it took about two years before realistic fakes started showing up, going on sale a few days after real ones would go on sale for $128.50. The fake passes were often found at stations near university and college campuses.

With the promise of Presto replacing all but cash fares by 2016, counterfeiting may be an issue only until then, since the company claims the electronic payment chip technology can’t be duplicated and is as secure as a bank card.

For now, fake Metropasses are harder to catch than tokens, since they can remain behind plastic in a wallet for an entire month. Spotting a fake Metropass often falls to TTC operators, who over time have seen enough passes that they can spot a slight discoloration, off texture,Comprehensive Wi-Fi and RFID tag by Aeroscout to accurately locate and track any asset or person. blurry text or misshapen hologram, Russell said.

Counterfeit tokens are sorted electronically once they’re paid into the system. At first glance, they look the same as regular ones made of two types of metal, but they can be discoloured and have misshapen logos and lettering.

Annual losses from fake tokens have hovered above $1 million since 2009. More than 300,000 fake tokens were found last year, Russell said, noting that’s about 0.3 per cent of all tokens collected.

Russell said he believes they’re being made in China, based in part on past experience. Two men were arrested in 2010 after a delivery of more than 3,The USB flash drives wholesale is our flagship product.000 counterfeit tokens from China was intercepted.

“It’s such a common go-to place for this type of thing . . . there’s similarities in distribution and mentality, whether it’s counterfeit Gucci bags and designer whatever,” Russell said, adding he believes holograms used on fake passes could also be made there.

Sometimes police alert Russell to fakes.Wear a whimsical Disney ear cap straight from the Disney Theme Parks! One afternoon last week, for example, he was informed that someone had been picked up at a Walmart carrying five fake passes.

"In almost all cases, your transaction will go through," said Eric Zahren, special agent in charge at the Pittsburgh field office for the U.S. Secret Service. "Everything will seem fine, but that doesn't mean your data wasn't stolen."

Criminals use the data from the magnetic stripe, along with personal identification numbers captured by tiny hidden cameras, to make counterfeit cards and drain people's accounts or run up big credit card bills.

It's a growing problem aided by increasingly sophisticated equipment that thieves place over legitimate card readers making it hard for customers to detect any tampering.

"It's a crime that's on the upswing nationally, and we've seen our share here in the Pittsburgh region," Mr. Zahren said.

Big payoffs are the main attraction. While bank heists net an average of $3,000 to $4,000, a single card skimmer averages 10 times that amount, or some $30,000 to $40,000, said Doug Johnson, vice president of risk management policy at the American Bankers Association in Washington, D.C.

The pirated card data are stored on the skimmers, which thieves later retrieve, or it's transmitted wirelessly to another location.Application can be conducted with the local designated IC card producers.

The devices are custom made to match individual machines so they are virtually undetectable.

"They look like they are part of the machine," Mr. Johnson said.

Automated teller machines and gas pumps are favorite spots for card skimmers because of the high volume of transactions and because thieves using glue or tape can attach the devices unnoticed.

Other targets include self-checkout aisles at supermarkets and other stores. At restaurants, servers may use handheld skimmers in back rooms after customers hand over their cards to pay the bill.