Most of us now depend on credit and/or debit cards for a majority of our financial transactions.
According to a new report from the Federal Reserve, the number of payment card transactions in the U.S. in 2015 totaled an estimated 144 billion – a growth of 19.9 billion from 2012 to 2015 – accounting for nearly $178 trillion.
That’s a lot of transactions and money, and as the use of credit and debit cards continues to grow, so do the challenges of protecting cards users against hacking and fraud. While they may not be the smartest folks in the room, fraudsters are creative and persistent.
So, what are credit card companies and financial institutions doing in 2017 to fight fraud on behalf of their cardholders, and what can cardholders do to protect themselves?
Use Your EMV ‘Chip’ Card
EMV, or “chip” cards, are now the top security against credit and debit cards fraud. All major credit card companies and financial institutions such as credit unions and banks that issue cards are now providing their customers with the EMV card.
Almost half of the card transactions in the world now involve EMV chips, according to a report in Credit Union Times. Adoption has been slower in the U.S. due to our more complex financial and regulatory systems but, Business Insider reported that more than 1.2 million national merchant chains such as Target and Walmart are EMV equipped and more than one million local and regional merchant locations now accept chip cards.
If you have an EMV card, use it whenever and wherever possible. Though not 100 percent effective in fighting fraud, EMV works. According to CreditCards.com, card fraud in the U.S. has declined significantly – with Visa reporting in October 2016 that chip-enabled merchants saw a 43 percent drop in fraud compared to a year earlier and Mastercard recording a 54 percent decrease in fraud costs among EMV merchants from April 2015 to April 2016.
More Ways to Protect Your Card
While EMV is a worldwide system, some financial institutions are bringing protection of credit and debit cards down to a more personal level with what’s known as control and alert technology. We are starting to see the emergence of these self-protecting payment cards, such as Android Pay and Discover Card (with the Freeze feature), enter the consumer marketplace.
CO-OP Financial Services is offering its affiliated credit unions a version called CardNav by CO-OP, an app that allows you to monitor and control card purchases based on various factors that you have set. These include type of merchant such as gas and groceries; the type of transaction such as online purchases; the dollar amount of a purchase; authorized use of card by a secondary cardholder; and the geographic location in which the card can be used, such as college campus.
Even with such security tools as EMV and card control/alert apps, the final line of protection against fraud is you. You should be fully aware of all your financial transactions, and pay attention to your financial records and reports such as the credit card account statements.
Make a commitment to fight fraud by taking time every few days to go online, log into your account, and make sure you don’t find anything you haven’t seen before. Especially important is to be certain there aren’t any charges – even small ones – that you don’t remember making. Finally, be protective of personal information such as PINs and passwords, and be cautious about your surroundings at financial access points such as ATMs – make sure no one is watching you.
And speaking of ATMs, there’s a strain of fraud prevalent today known as “skimming.” It refers to when a fraudster attaches a device to the ATM card reader and even the keypad. The user slides their card into a skimmer and the devices reads all the account information stored electronically on the magnetic stripe. Here’s a few things you can do to fight back:
- Inspect the ATM: Take a minute to check the keyboard, card slot and surrounding area on an ATM before you use it. The keyboard and card slot on an ATM shouldn’t feel loose, rattle or jiggle when you pull on it.
- See something, say something: If you find a skimming device, call the police and notify the ATM owner. Not sure what you’ve found? Report loose parts or anything else that’s puzzling to the ATM owner. Even if it’s just faulty equipment and not skimming, they’ll want to make a repair.
- Decrease the chance for video recording of your PIN: When entering your PIN, always cover the keyboard with your hand, in case criminals have placed hidden cameras nearby to capture your PIN.
- Protect your PIN at checkout, too. Skimming is not just for ATMs – it also happens when you swipe your card at the point of sale. Use your hand to cover the keyboard when inputting your PIN, in case a camera has been installed to record that information. Alternatively, choose credit over debit and avoid using your PIN altogether.
For more information on how you can guard against credit card fraud, visit the Federal Trade Commission site.