Bonneville Bancorp is taking an unusually drastic — and seemingly counterintuitive — approach to fighting fraud. To make sure its customers use their PIN codes, shoring up security for debit purchases, it is prohibiting signature debit payments in some states.

Though PIN codes provide an additional layer of security, signature debit transactions generally earn issuers more money, and observers say it is unheard of for a bank to consider its fraud losses severe enough to switch off that revenue stream.

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