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Fighting Payments Fraud: It’s Whack-a-Mole TimeBy Patti Murphy Is nothing safe? In payments, it seems nothing is. Combating fraud in the payments space is like playing a game of whack-the-mole: halt the bad guys on one front and before you have a chance to say “will that be paper or plastic?” they will find new vulnerabilities that allow them to pop up again. Even smart technologies – so-called because they use computer chips imbedded in credit and debit cards instead of magnetic stripes to store vital customer information and transaction details – can be compromised, as a team of scientists reported last fall. A report from the RFID Consortium for Security and Privacy (its members include scientists from the business sector and academia) suggests the chips in contactless credit and debit cards are prone to data skimming. Contactless cards communicate with POS terminals using advanced radio frequency technologies. Instead of handing over their cards to cashiers, customers simply wave them in front of the terminal (or in some cases, tap cards against terminals); the imbedded chips handle authorization and other details of the transactions. While the chips in these cards generally are considered secure than magnetic stripes (which have been used to secure credit cards for almost 30 years), it turns out that inexpensive RFID readers can surreptitiously harvest protected information from the cards, even those stashed away in wallets, the RFID Consortium discovered. From that point on it’s anybody’s guess what would happen. But experts says it’s pretty easy to use the stolen information to clone cards, or simply use the information to make fraudulent purchases over the Internet or by telephone. |
Payment Fraud ResourcesVulnerabilities in First-Generation RFID-Enabled Credit Cards Sercet Service Financial Crimes Division FBI annual report on Internet Fraud Fedral Trade Commission Internet Auctions - A Guide for Buyers and Sellers Consumer Sentinel - International law enforcement fraud-fighting program Payments ArticlesMobile Phones as Electronic Wallets New Era for Check to ACH Conversion New ACH Rules: A Tipping Point for EFT Debit Facts: A Debit Card Tutorial |
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