Friday, December 1, 2017

Don’t let money thieves ‘tap out’ your credit or debit card

Is someone “tapping” your credit card?

Let’s hope it’s just you.

If you’re a credit cardholder with a PIN code, you might be concerned that a thief can now “tap” your account for purchases under $50. ($100 in Australia)

If you’re card is stolen, or you inadvertently leave it behind, anyone finding it could run up a series of purchases before you’re aware.

What exactly is tapping?

It’s a payment method that lets you make everyday purchases without having to swipe the magnetic strip on your card or provide your signature.

Visa and MasterCard market this feature by saying: “It’s faster than fumbling with cash or waiting for change, and it makes checkout easier than ever. All you have to do is Tap & Go™ at one of the hundreds of thousands of PayPass-accepting merchants around the world.”

Tap technology is a new feature that uses an embedded chip and antenna to ensure your payment details are transmitted safely and securely without your card leaving your hand.”

Sounds good, but do recall we live in a society where e-fraud and identity theft are rampant, costing Canadians billions of dollars each year.



Your card issuer cannot remove the “tap” feature. So, it’s best for security reasons if you always use your PIN.

That way, if your card is lost or stolen and someone does run up tap charges, your card issuer promises to reimburse you. They will be able to tell that you personally do not use the tap feature.
Tap transactions are identifiable.

The Financial Consumer Agency of Canada says the “zero liability policy” applies to Tap & Go transactions. 

“In most cases, should a card with Tap & Go technology be lost/stolen, any fraud on the card should not rest on the cardholder,” communications officer Natasha Nystrom says.

The FCAC encourages all consumers to read their cardholder agreement to fully understand what their responsibilities and liabilities are with respect to the Tap & Go function. FCAC also suggests that consumers check their monthly statements to make sure that the transactions that appear for the statement period are accurate and to report any inaccuracies.

Financial institutions/issuers that offer Tap & Go credit cards have the option of setting daily or weekly transaction limits.

My own bank told me it has received complaints from consumers about tapping and is passing those along to Visa.

Of course, if you like the convenience of tapping, then tap away.

Neither the FCAC nor the Canadian Bankers Association records how many consumers have cards with the Tap & Go feature. However, the CBA reports there are 74.5 million Visa and MasterCards in circulation in Canada.

A similar feature available on debit cards is Interac Flash.

“Interac Flash is Canada’s first contactless debit technology,” says Teri Murphy, senior manager, corporate and stakeholder relations for Interac Association.

“There are limits set by financial institutions covering the value and amount of Flash contactless transactions, which are typically smaller-value purchases. Usually, the limit would be up to $50. There may also be a higher, cumulative spend limit. Once this limit is reached, you’ll be asked to insert your card and enter your PIN, which will reset your cumulative spend limits. This depends on the limits set by the Interac Flash issuing financial institutions.”

If you have a consumer problem, call 905-526-4665 or email
amacrury@thespec.com

What about security?

Although you can make a contactless payment with up to 4cm reach, most credit card companies require you to tap your credit card for the transaction to go through, ensuring you don't pay for another person's sale. Even if you do accidentally tap your credit card twice on the terminal, you won't be charged because every transaction generates a unique authentication code which cannot be used again.

The wireless technology can be concerning because no pin or signature is needed for a sale to be processed. Not to fret - all NFC cards use the latest chip technology, which come with secure encryption (cryptographic key) technology to protect you from thieves who might try to 'scan' the wallet in your pocket.

There's not much stopping a thief from hitting up the shopping centre with purchases under $100 at different outlets but as with other payment methods (e.g pin, signature), most credit cards provide a zero liability policy. This means that you will be covered for any unauthorised transactions, with 100% reimbursement. Some providers state that you must notify the institution immediately in order to get your money back.

https://mozo.com.au/credit-cards/guides/just-one-tap-a-guide-to-paywave-and-paypass/109
 

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