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Contactless card fraud soars: are they safe to use?

Get behind the latest fraud figures on ‘touch and pay’ debit and credit cards

Contactless card fraud soared by almost 150% last year, according to new figures from the UK’s leading fraud body.

Financial Fraud Action (FFA) UK reported that the amount lost to contactless card fraud has leaped from £2.8m in 2015 to £6.9m in 2016. In 2014, the amount lost to this type of card fraud was just £153,000.

Use of contactless cards has rapidly increased, with more than £25.3bn spent on them throughout the whole of 2016.

What are contactless cards?

Contactless debit or credit cards allow you to pay for items worth up to £30 at a time without entering your Pin.

Every contactless card has a small chip in it that emits radio waves. To pay for something, you hold the card near a payment terminal, which picks up a signal and processes the transaction.

You can tell whether your card is contactless by looking for a small logo on it which consists of four small curved lines, similar to the wi-fi symbol.

The logo is also displayed on payment terminals that accept contactless payments.

Why has contactless card fraud increased?

It’s important to see contactless card fraud in the context of how much is being spent on the cards today.

FFA UK says that losses from contactless card fraud equates to 2.7p in every £100 spent using them, and that this represents a decrease from 3.6p in every £100 spent in 2015.

It also says that ‘fraud on contactless cards and devices represents just 1.1% of overall card fraud.’

Are contactless cards safe to use?

For the most part, yes. However, a number of flaws have been exposed with contactless cards.

In 2015, Which? revealed a security flaw in contactless cards that thieves could exploit to make expensive online purchases.

After easily and cheaply acquiring contactless card-reading technology from a mainstream website, our researchers were able to remotely ‘steal’ key details from a contactless card and use them to order items, one of which was a £3,000 TV.

Another risk has been identified when a contactless card has been stolen and subsequently used fraudulently, with the original card owners finding that payments have been processed on a card they have cancelled.

This is because payments using the cards are authorised offline and processed later, not confirming that the card used for the payment is no longer in use.

Last year, a Which? investigation found a number of banks allowed us to go on a contactless card spending spree, spending more than £200 through 10 consecutive payments, without blocking our cards or asking for a Pin number.

If you are a victim of contactless card fraud, your bank should refund you immediately – unless it can prove youve acted negligently.

How do I stay safe using contactless cards?

  • Never hand over your card If your card is taken out of your sight someone could run it through a skimming device, which copies the data from its magnetic strip.
  • Ask for a receipt Contactless users aren’t always offered a receipt – so if you want to keep track of spending and make sure you aren’t being overcharged, you may need to ask for one.
  • Check your statements You should do this as regularly as possible to look for unusual transactions, including on lost or stolen cards as these can still be used after being cancelled.

This story was updated on 30 May to refer to Which?’s 2016 investigation into contactless cards. 

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