Credit card fraud goes hi-tech
Credit cards & lifestyle–a new dimension
If you’re a fan of NCIS, the CBS show, you may have seen a storyline in a recent episode that involved a thief using an electronic device to capture credit card details from shoppers as they passed her on the sidewalk. And you may have assumed that this was an example of the sort of science fiction that some series–have you ever watched CSI?–sometimes indulge in.
But you’d have been wrong. “Electronic pickpocketing” is all too real, as WGRZ of Buffalo, NY recently showed. The practice has arisen since some credit card companies began embedding Radio Frequency Identification (RFID) chips into their cards. These are designed to save you swiping your card, and instead merely hold it close to a sensor. But they also permit thieves to steal your information while your plastic remains in your pocket or bag. And that allows them to clone your credit cards.
Credit cards and lifestyle used to be linked in marketers’ minds in order to sell you cards. However, now you need to adjust your lifestyle in order to protect your cards from criminals. Luckily, it’s easy to do so when it comes to electronic pickpocketing. You merely have to keep your card in the plastic sheath (which shields the RFID signal) that it probably came in. If you didn’t get one, or you’ve lost it, ask your card issuer to provide one. And–if it won’t–buy one online.
Credit card fraud–some other risks
Besides convenience, one of the things that people might have looked forward to with the introduction of RFID chips in credit cards was the avoidance of bogus swipe devices. These “skimmers” are generally attached in an unobvious way to legitimate self-service swipe terminals, especially at gas stations. Customers insert their cards, but their information is skimmed by fraudsters at the same time as it is legitimately read by by the terminal. These are still around, and just last week KDVR reported that three had been found in Grand Junction, Colorado.
Equally problematical are skimming devices that are used by corrupt clerks in stores. They often keep these under the counter, and surreptitiously swipe cards while engaging customers in conversation. That’s why it’s so important never to lose sight of your card, wherever you are.
The problem is, once a card is cloned or stolen it’s fairly easy to use it to make purchases. That’s largely because clerks in stores rarely compare names or signatures on cards with those on transaction slips. Also last week, WPXI discovered just how rarely these checks are made. It sent out two women researchers with a male producer’s credit card. And they repeatedly charged purchases unchallenged.
Credit cards to get better?
On October 21, The New York Times ran a feature that explored some of the ideas that credit card companies are considering to try to combat fraud. These were covered by this blog many months ago, but the information is worth repeating.
Citi credit cards are arguably the lead innovators at the moment. The bank is currently trialing cards that are no less thin or flexible than existing ones, but that contain a battery with a four-year life expectancy, and an embedded keypad that allows users to insert their PINs. Until they’ve done so, card information remains inert and unreadable.
Citi plans to roll out the program sometime next year, starting with two of its products that have popular credit card rewards programs. It’s expected that users may be able to choose to pay for a purchase using reward points simply by pressing a button on the card itself.
Indeed, because of the extra revenues at stake, some expect users of products that feature credit card rewards to be the earliest beneficiaries of this new wave of innovation. This time, let’s hope that it takes fraudsters a long time to catch up.
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