When shopping this year, consider this: In 2015, over 13 million consumers fell victim to credit card fraud at an amount of $15 billion. However, since the widespread adoption of the chip and pin cards known in the industry as EMV (Europay, MasterCard, and Visa)*; credit card fraud rates have dropped 54% in April 2016 compared to April 2015 due to chip technology**.
Next time you get frustrated because you keep trying to swipe your card, when you are supposed to insert it into the chip reader, remember that YOU are being protected by this new procedure. So instead of grumbling, tapping your foot or steaming in some other way over the minor delay caused by this new action, look up and make eye contact with the people around you. Say hello or happy holidays to the person standing in front of you serving you during this busy time. You can even use these few extra seconds to say thank you for protecting my credit in this small way!
Why is the chip card safer? The information stored on cards with just the stripe is finite. Once a hacker gets this information, they can copy your card’s information and begin using your card number. The chip is different because it creates a unique and random code for each transaction. So now if your card is copied, the information stolen is no longer valid.
What if you do have a chip and pin card but the store you are shopping at is still using the old reader, who is responsible? In this case, it is the merchant. Beginning in 2015, merchants were encouraged to upgrade to the EMV system on their POS (point of sale) terminals. As an incentive, processing fees are lowered for merchants who adopt the new system. For those who are dragging their feet, not only will they pay higher fees, they will also be responsible for any fraudulent activity on behalf of their customers. In the highly unlikely situation that your chip and pin card is compromised on an EMV compliant terminal, the card issuer is responsible for any fraudulent activity on your card.
You’ve got the right card; you only do business with merchants that use the right system, so now fraud is a thing of the past, right? Well, not so quickly. In the world of credit card fraud, it is always a race between the hackers and the security professionals. Typically, if these criminals are finding it difficult to get your credit card information, they will just find another way to get your hard-earned money. One of more prevalent schemes has been ATM fraud. There are a few methods used to copy your debit card, from card skimming and trapping to cash trapping. Most ATM fraud is accomplished by attaching some sort of physical device to the ATM that appears to be part of the actual machine. These devices can steal the data off your card (skimming), take the actual card itself (card trapping) or take the cash from your withdrawal (cash trapping). If you need cash, the best method is the old school one of going up to a teller and withdrawing the cash you need. However, if time is of the essences look for an ATM machine inside a bank.
There is no better time than the holidays to take a few minutes to get to know the people in your community and to ensure your financial security for the next year and beyond.
*Fraud statistics from Javelin Strategy & Research.
**Counterfeit card fraud statistic from NBC News.