This post on the surface, suggests that Citibank is indicating to their customer that compomises on all Canadian ATM's requires them to cut off access to their customers.

Aside from how well Citi handled this, I think this it is more plausible that this customer used a machine at a specific ATM location that had some fraud perpetrated. I am not aware of any situation where an entire country is under suspicion as the article seems to suggest. I know the customer is frustrated, but the issue here is actually broader in many respects – its a worldwide issue and everyone should go to great lengths to protect their PIN every single time they use it at a merchant, or at an ATM.

The post links also to this related story, which resulted in cards being cancelled after fraud was perpetrated on US machines.

Boing Boing: Citibank under fraud attack, customers locked out of accounts

ake called Citibank's international customer support number, and soon learned that the lockout was part of a much larger fraud crisis — by no means the only data security issue at Citibank in recent months.and ….

Rather, she informed me that the ATM networks of
Canada, Russia and the United Kingdom have been compromised. I used the
term class break as a question and she repeated that there has been a
class break of the ATM networks in those countries.

Relevance to Bankwatch:

How Banks handle customer fraud is a determinant in customer loyalty, and strategic differentiation.