Contactless payments were once heralded as a way to combat large-scale fraud in the payment card industry. Despite best efforts by banks and card issuers, the number of fraudulent transactions remains alarmingly high. To make matters worse, customers who report their card as lost or stolen may still be a victim of fraud up to eight months later.
Contactless Payments Are Not The Answer
Moneysavingexpert.com, a renowned UK website, has conducted an investigation into contactless card payments. As it turns out, losing a card, or having it stolen, is only the beginning of many future problems. Even though these cards have been canceled, they can still be used to conduct fraudulent transactions for several months afterward.
This whole ordeal is made possible by retailers who authorize tap-and-go card payments in an offline manner. If they would go through bank filters, they would immediately notice the card has been canceled. A very worrisome scenario, albeit it only seems to affect customers in the United Kingdom, for now.
MoneySavingsExpert stated the following:
“Our investigation highlights a chaotic system in which banks are powerless to prevent cancelled cards being used by fraudsters, and don’t even know when the fraud will end. . And while some banks prevent accounts being raided by this type of fraud, others leave it to unsuspecting customers to spot dodgy payments – even though they can start happening months down the line.”
Contactless cards, while being seen as a very convenient way to pay for goods and services, seems to be fighting an uphill battle right now. Although the fraud numbers are a lot smaller compared to overall card fraud, this is a worrisome trend. The UK Cards Association will need to nip this threat in the bud sooner rather than later.
While it is true UK consumers are protected against financial losses, this is not exactly a reassuring situation Contactless card payments are gaining more popularity in the United Kingdom as of late, and it remains to be seen how these fraud numbers will evolve in the coming years. Reporting any suspicious transactions to the bank remains of the utmost importance.
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