Visa Chip Enabled Cards Are Reducing Fraud

Summary:
It looks like Visa's chip credit cards are doing their jobs. Merchants have reportedly seen an 18 percent drop in counterfeit transactions.

It was a subtle change to your Visa credit card — the addition of a small little chip in hopes of reducing fraud.

And it looks like it's working. USA Today reports merchants have seen an 18 percent drop in counterfeit transactions. 

Visa started rolling out the new EMV chip-equipped cards about six months ago, so an 18 percent difference is certainly significant — but the security measures aren't perfect.


And scammers are now reportedly turning to emails — an age-old trick — to try and get your credit card info. 

"Now, they're sending much more legitimate emails. It's hard to tell that they're fake. They often fake an email address so it looks like it's from your bank. They use graphics from your bank. It looks very legitimate a lot of the time," an internet security expert told WAGA.

While the cards might be safer, one complaint from customers is the longer-than-usual wait time the EMV chips take to scan.

But Visa says it's looking to speed up that process. Instead of sliding your card in and waiting for the transaction to finalize, Visa announced Tuesday that new technology will allow you to pull your card in two seconds or less.
Identity Theft
About 12.6 million people were victims of identity theft in 2012, according to a study by Javelin Strategy & Research. Minimally, identity theft consists of someone hacking your credit card information and making fraudulent purchases. In a worst case scenario, this hacker is opening accounts and piling up debt in your name, damaging your credit. If you're a victim of a credit card hack and identity theft, report your losses first and then file a fraud report to see if you can recoup the money. Stay in regular contact with your bank to ensure that fraudulent charges are erased.

Enhance Internet Security
Your credit card was likely hacked by a cybercrook, which means you have to take a look at your Internet security. The best way to prevent a credit card hack from occurring again is to change the passwords on any sites you have your credit card information stored, a procedure that's time-consuming. Better yet, refrain completely from storing this confidential information on other sites, which is laborious. When changing your passwords, make sure they're unique and contain a combination of numerals and letters -- lower case and upper case -- so they're tougher to crack.

Credit Monitoring
If you've been hacked, you're going to want to better monitor your activity, so give serious consideration to signing up for a credit-monitoring service. For a monthly fee, such services will notify you if there's been suspicious activity on your account, perhaps even temporarily freezing it until they've had a change to speak with you about it. Such services greatly reduce the risk of a credit card hack spiraling completely out of control and can give you added peace of mind. However, they don't come without cost -- the major services can cost $10 to $15 a month, or $120 to $180 a year, as of the date of publication. To save money, you can request your free annual credit report from the three major credit bureaus -- Experian, TransUnion or Equifax -- and monitor your credit card account this way. You are entitled to one free report from each agency each year; spread them out for maximum benefit.

Insecurity
A credit card hack can also lead to psychological issues. For instance, many victims feel as if they've been violated and are reluctant to use their credit cards to make future purchases, whether it be in-store or online. Furthermore, a credit card hacking can also make victims somewhat paranoid and more apt to checking their online bank account regularly in order to monitor its activity. Often times, the psychological burden can be more of an issue than the other problems associated with a hacking.

Alert the Credit Bureaus
If you're the victim of a credit card hacking, aall one of the three major credit bureaus toll free o inform them of the incident and place a fraud alert on your account. Under rules established by the Federal Trade Commission, you can opt for an initial alert that lasts 90 days or one that stays on your report for seven years and prevents solicitations from being sent to your home. The alert also grants you one free report from any of the bureaus.

Safety tricks 
Signature Cards Just Don’t Cut It
The retail industry says the use of signatures with chip cards is less secure because signatures are easy to forge, and card readers don’t make any attempt to authenticate them.

The card industry defends the use of signatures, however, saying the power to combat fraud lies in the chip, not the PIN or the signature. PINs add an extra layer of protection only for cards that are lost or stolen, says Vanderhoof. They’re not needed to protect against counterfeit-card fraud, whereby a hacker steals a lot of card data from a retailer’s network then embosses it onto counterfeit cards to make fraudulent purchases in stores.

But retailers say that fraud from lost or stolen cards is not trivial. “I’ve seen as much as 30 to 35 percent [quoted],” says Mark Horwedel, CEO of the Merchant Advisory Group. “Most of the cost of counterfeit card fraud is eaten by the banks themselves, while the cost of lost and stolen card fraud is divided between merchants and the financial institutions.”

Merchants also say they fear that if thieves find a way to clone or otherwise subvert the chip in EMV cards, there will be nothing to prevent them from using the card data if a PIN isn’t required for transactions. Researchers have already found a vulnerability that would allow an attacker to generate the supposedly secure unique transaction code (.pdf) the chips generate, and retailers say it may only be a matter of time before they can clone the chip as well.


“If you only have one way of stopping the cyber thief, they’re going to put all their energy into getting around that,” says Jason Brewer, spokesman for the Retail Industry Leaders Association. “By not having the PIN, you’re only forcing them to figure out a way to get around the chip. There are already skimmers [devices placed on card readers to sniff data] trying to figure out how to get around the chip.