Contactless cards subject to fraud
by Kay Murchie
According to a European White paper released last week by Eurosmart, the smart card industry body, customers using new ‘contactless cards’ in London could lose up to £50 every day.
The cards are being rolled-out across the UK over the next 12 months and allow consumers to pay for items up to £10 by waving them within 10cm of a card reader without having to enter a Pin or provide any identification but customers have been warned by Eurosmart not to rely on this 10cm rule.
Eight banks are taking part in the roll-out, including Bank of Scotland, Barclaycard, Citi, Halifax, HSBC, Lloyds TSB and RBS Group with each card differing in its functions.
The EU paper points out that readers can be easily modified by fraudsters to capture card data from a longer distance. This allows them to steal from contactless cards by simply standing near people in a shop or on public transport. Furthermore, cards can be read through bags and clothing.
A contactless cardholder can withdraw £10 per transaction and the card can be read up to 5 times per day which could leave a person £50 worse off during their commute to work.
The White paper has proposed covering the cards in a metal shield - similar to small metal pockets used in the US.
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