Consumer Reports: Finds Debit/Credit Card Reader Flaw

Convenience is a way of life in America. Businesses are always looking for ways to make life easier for its customers. The new wave of credit card technology is designed so that consumers only have to wave a card in front of a specially designed card reader, as opposed to having to slide the card through so it makes contact with the card reader. Unfortunately, consumers may be trading security for convenience as these “contactless” credit and debit card scanners may not be secure, according to research by Consumer Reports.

Portable Readers

It may sound like something you see on a television show, but thieves can and do buy their own credit card readers which cost less than $100. While you are waving your card over the contactless machine at a retailer, they may have their own card reader in their pocket or bag. If they are close enough, it is easy to collect the personal information on the credit or debit card you are using.

Protect Yourself

Unfortunately, many consumers are not aware that their credit or debit cards may be the type that can be used with contactless readers. There are 35 million cards in the U.S. embedded with the RFID technology that makes it possible to complete a transaction without swiping your card. Even if you have never used your card in this way, it is still vulnerable if a thief with a card reader bumps into you or gets really close to you on the checkout line.

One solution is to request a different type of card from your card issuer – one that is not RFID-enabled. Another solution, though not 100 percent effective, is to make a protective sleeve for the card using duct tape lined with aluminum foil. The sleeve helps block the signal from being picked up by a random card reader, but according to Consumer Reports, it does not block the signal completely.

Chase Blink, MasterCard PayPass and Visa payWave all represent the new RFID-enabled technology for credit cards. Andrea Rock, a senior editor of Consumer Reports, says thieves are more interested in stealing account numbers and security information from debit cards than credit cards because they can then easily create a counterfeit card and use it at an ATM to withdraw cash.

The Other Side

According to releases put out by the banking industry, the contactless credit card readers that retailers and other merchants use are safe and secure. As these types of machines become more popular and widespread, and the number of cards issued with the RFID technology increases, there is the threat that identity theft could escalate.

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.