Banks and credit card companies have gone to great lengths over the years to stem the tide of credit card fraud. They have made significant gains but committing credit card fraud is still pretty easy in this country. In fact, it is easier in the United States than in most other countries. Why is that? There are actually two reasons.
First is the fact that so many retailers still allow customers to swipe credit cards instead of forcing them to use chip readers. Second is the relative ease with which information submitted online can be stolen and sold on the dark Web.
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Hanging onto Magnetic Strips
An excellent article from cybersecurity expert and former Washington Post reporter Brian Krebs explains that the U.S. is the last of the G20 nations to make an effort to fully transition from magnetic stripe cards to chip-enabled cards. The vast majority of G20 nations got rid of magnetic strips years ago. Yet even today, credit and debit cards in the U.S. still carry magnetic strips – even if they are chip-enabled.
What’s the problem? U.S. retailers have been slow to transition to chip readers. Maybe they don’t like new things. Perhaps they don’t want to spend the money on new card readers. No one really knows. But the fact remains that chip readers are far from universal in this country.
Gas stations are among the biggest offenders. It is still hard to find card readers at gas pumps that accept chip-enabled cards. Even tap-and-go terminals have been slow to catch on.
At any rate, Krebs also cited research from New York University (NYU) that shows just how valuable magnetic strip cards are on the dark Web. The same research shows that demand for breached online accounts is growing commensurate with magnetic cards being phased out.
Online Information Being Stolen
Utah defense attorney Anita Dickinson defends clients charged with credit card fraud. She notes that she and other defense attorneys are no longer limited to cases involving physical cards that were either stolen or replicated. They are also seeing a growing number of cases involving online fraud.
Here’s the thing: it is still pretty easy for hackers to breach computer networks if they have access to the right people. Hackers know that a simple phishing attack could open the door to information on millions of consumers. And it happens more often than you think.
Research from 2018 shows that at least 40% of the security breaches occurring at small businesses were directly attributable to employees. Either employees perpetrated the breaches themselves or they were victimized by hackers who took advantage of their carelessness.
The problem with online fraud is that you do not need a physical card to commit it. All you need is information. You need a person’s name, mailing address, and account information. That’s it. Get that information and you can do a lot of damage before your victim finds out.
Security Is an Individual Thing
The long and short of all of this is that credit card fraud is still a profitable crime. It also remains relatively easy to commit in this country. Consumers should understand that their best hope of security is not relying on merchants and credit card companies to do something. It is in being responsible for themselves.
Security is, and always has been, an individual thing. The best way for each of us to protect ourselves is to be extremely cautious with how we spend, who we give personal information to, how we use credit and debit cards, and so forth.