News of credit card data breaches hit the headlines almost every week. Just in the last 30 days, major brands like Saks Fifth Avenue and Best Buy announced that people’s credit card information was exposed. In the wake of more notorious hacks, like last year’s Equifax scandal, it’s fair for people to wonder whether their credit card details can truly be secure. A new survey by Javelin Strategy & Research found that 69 percent of consumers are concerned about fraud—partly due to the increased media coverage of breaches.
While physical credit card security has improved greatly in recent years, the influx of online fraud has made big data centers an even bigger target.
Your Cards Aren’t Being Counterfeited Like They Used To
Credit card fraud is migrating online. That’s because the small EMV chips, which are now ubiquitous, have made it extremely difficult to counterfeit credit cards. The smart chips are like small computers that hold a card’s encrypted data. They are less susceptible to skimmers, and even harder to dupe. The days when a fraudster could just waltz into a local convenience store and use a counterfeit card are (mostly) gone.
While this may seem like a step in the right direction, such a trend can serve as a double-edged sword. As Fortune’s Jeff Bukhari suggested, “criminals are keeping their illegal activity online, where the new chips do not come into play.” He argues that the chips have helped fraudsters turn to techniques that allow them to avoid apprehension.
This is supported by data from Statista. This year, losses from counterfeit payment card losses are expected to hit $1.8 billion—down 28% from where they were three years ago. On the other hand, card-no-present (CNP) fraud is up 106% in that same time. The Javelin Strategy & Research study found that, this year, CNP fraud is “81% more likely than point of sale fraud.” This is the greatest gap the company has ever observed.
Who Has Your Data and How Much of It Do They Have?
By now, one thing should be clear: Most credit card details are stolen through online data breaches. That is the point of failure in the system, and it’s one where EMV chips cannot do much good. Often, it’s also difficult to fault the companies involved. In most cases, these companies were targeted by third-party malicious actors, like hackers, who exploited weaknesses in their infrastructures to steal the data.
Better data security standards are one way to combat data breaches. While asking companies to apply more rigorous standards may sound like an easy solution, the reality is much more complex. Hackers and these companies are in a constant arms race. The moment some vulnerabilities are patched up, hackers are already looking for the next way in. Bad practices certainly contribute. For example, when the website Ashley Madison was hacked a few years ago, the site had been using outdated encryption methods that made cracking user details take 11 days instead of several years.
Virtual Credit Cards and Other Best Practices To Safeguard Yourself
Some credit card issuers—including Citi, Bank of America and Capital One—allow users to generate temporary credit card numbers before they make online purchases. The numbers are linked to your account only for some short amount of time before they expire. Therefore, if a hacker were to intercept those numbers somehow…
The post Is Your Credit Card Less Secure Than Ever Before? appeared first on Liberty Investor™.