Last year, fraud of contactless cards resulted in a total loss of £1.18 million for people all across Britain. This figure is a dramatic increase from the year before, in which the amount lost was £711,000. With the rise in popularity of contactless cards, has come the rise in contactless crime. The number of store transactions made by contactless cards across the UK went from 30% in 2017 to 52% in 2018, with it seeming that the crime based around it has risen in a similar amount.
How Is Contactless Fraud Performed?
The contactless card is seen as a double-edged sword due to its convenience. Whilst it results in not needing to waste as much time as the slower chip and PIN method, it also sacrifices the security that option provides. Cyber criminals can use scanning technology when in range of a contactless card in order to gain a reading of the data from a card’s built-in chip to use for themselves. Alternatively, they can make a contactless purchase of up to £30 with a stolen card.
Making such relatively small payments quickly through contactless cards will result in more of a fast-paced scattergun approach. This has its pros and cons, as thieves will generally spend less overall with contactless as they can’t go out and buy something expensive, but there is always a small chance the victim doesn’t notice the small change in figures when checking their balance, and will potentially take longer to cancel their card.
The amount of contactless fraud cases in the UK increased from 1,440 throughout all of 2017 to 2,739 between January and October of 2018 alone. The latter figure even accounts for around 50% of contactless card crime throughout the past five years alone.
Is Contactless a Flawed System?
The rise of crime related to contactless cards raises a question in some eyes – is contactless worth using?
The answer to that, in short, is yes. Whilst fraud can be expected to rise with contactless cards, crime is something that will always be inevitable, and criminals will find methods to perform their deeds regardless of the walls put up to prevent them. In order to perform the fraud in the first place, a criminal would require the necessary technology to scan the card, which isn’t something that happens every day, as they’re hard to get a hold of, and even harder to look natural with.
In response to the fraud problem, UK Finance, a representative of around 300 banking and finance firms, weighed in on the matter. According to them, a card system is necessary to perform contactless fraud and it isn’t something that can happen by just being next to someone.
They also made it apparent that in the grand scheme of things, contactless fraud is a fairly minor part of overall financial crime. The figure of contactless card crime only made up 3% of total card fraud in 2018, with the total amount being lost to card fraud in 2018 being as high as £281.2 million.
The Fact and Fiction of Contactless Crime
Beyond that, the common problems raised towards contactless cards can often be arguable at best. Whilst there were tests made by the consumer group Which? to steal contactless details with a card reader, it’s important to remember this was a test conducted in 2015. Since then, further advancements have been made in ensuring that payment methods in general are more secure.
Going back to the point of the £30 limit of contactless payments, this is probably the biggest reason contactless fraud isn’t’ as bad as other types.
It isn’t as though such transactions would go completely unnoticed either, with Giles Mason of the UK Card Association stating that: “Every card payment is fully traceable, right through to the recipient account,” in an interview with Tech Radar. He went on to add that whilst a thief could use a registered terminal connected to a retail account, that’s only a theoretical possibility and that “it would be easy to track the thief down.”
It’s also important to note that even if someone had the technology necessary to copy a card’s data, they would have to get past the interference that nearby metal objects would provide, which would be incredibly difficult to do in most commercial settings regardless of whether it’s a popular retail brand or local store. This overall means that contactless isn’t nearly as dangerous as the statistics may suggest.
Whilst evidence of contactless fraud is obvious, the problems with it are similar to problems you’d face with any method of payment. Overall, the increase of fraud can be chalked up to the increase in use, and companies are working around the clock to clamp down on this crime.
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