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Scams targeting the new chip cards

Scams targeting the new chip cards

 

                Chip cards just turned one year old!  The first credit cards with embedded chips were rolled out last October. Now nearly half of all credit cards in circulation, 600 million cards, have small computer chips according to the Electronic Transaction Association. Data from Visa and Mastercard shows about a third of all merchants are using readers that can accept chip cards.

                While the chip card technology has been around since the 90s and used in other parts of the world, the cost and complexity of the transition postponed adoption in the United States.

                So far the most frequent complaint from shoppers has been about the longer wait time per transaction but still nearly 4 in 5 Americans, or 78 percent, said they have positive feelings about chip charge cards. There's little doubt using chip cards provides much greater security.

                The switch to smart technology (known as EMV, which can process card transactions with embedded smart chips) means that a customer's payment method includes a tiny microprocessor. The chip creates a unique code for each individual transaction and can't be easily duplicated by thieves the way a magnetic stripe card can.

                By the end of this year, it is estimated that about half of all merchants will have migrated to chip technology and the majority by the end of 2017 which will reduce another complaint concerning chip credit cards – whether to swipe or insert the card.

                Despite the security of the chip cards, scammers are working to find ways to steal sensitive data.

Scammers, pretending to be card issuers, have been sending emails to individuals who haven't yet received their new chip cards. The emails ask recipients to update their accounts by providing personal information in order to receive their new chip cards, or to click on a link to continue the process.  As in other scams, once your share your personal financial information, funds are removed from your account(s).  Also, by compiling profiles on individual consumers, some scammers are able to open credit cards in their victims' names.

                Another scam is a variation of one used with the old standard swipe cards, a scammer installs a card reader on a gas pump, ATM or other semi-remote location that is not staffed by an employee who is validating the card.  The authentic self-service reader is bypassed by the scammer’s version and with the high volume such locations can have, it may be hours before a difference is noted. During that time dozens of credit cards can be compromised. 

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