…Don’t swipe

I recently dined at a local restaurant for lunch.  At the end of the meal the waiter handed me the check.  As I usually do, I blindly handed over my credit card.  The waiter disappeared for a few minutes and reappeared with my credit card receipt, a pen and a smile, happily wishing me a nice rest of my day, and it did turn out to be a nice day.  The next day, however, not so much.  I received notices from my bank of fraudulent transactions.  I immediately called and quickly verified that the transactions that occurred half way across the country, were indeed, fraudulent.

Someone had acquired my credit card number and attempted to use it for in-person transactions.  They had created a fake credit card with my information.

During my conversation with the bank, they immediately cancelled the card and arranged for a new card to be sent.  I had other cards I could use in the meantime, so, at first, it wasn’t much of an issue.  But then I started thinking about all of the accounts that were configured with the original account for automatic payment and renewal. I would have to log in to each and update the card, and I’ve probably forgotten one, or two, or three.  I’d have to just wait until I received the email telling me the payment hadn’t gone through. Then I’d log in and update the account information with my new card.   The process took about a month to complete.

How did this happen?  I reviewed my transactions and the only place I had used that card recently was the restaurant where I ate lunch.  I couldn’t prove it, but chances were very high that my credit card information was stolen at that restaurant.  How? There are a number of possibilities: someone could have simply written down the card number; someone could have swiped the magnetic stripe and quickly captured the information electronically; someone could have compromised the restaurant’s magnetic stripe card reader to capture and store EVERY card that was swiped, without the restaurant or any employee knowing.  I’ll never know for sure, but the one thing I do know is that all the scenarios have something in common: the magnetic stripe and the card being out of my control.

The magnetic stripe on you credit card is not secure.

There are no protections.  There is no security in the card to prevent someone from reading the magnetic stripe and obtaining your credit card information.  A magnetic stripe reader is cheap, small, and readily available. You might recall one company was giving them away to use with your phone.

So what can I do, what can WE do to protect ourselves.  Eschew the magnetic stripe.  What do I mean by that?  I mean, don’t use the magnetic stripe, don’t use it when you’re doing self checkout and, don’t let your waiter walk away with your card, don’t let the cashier swipe your card.  It means choose a different merchant. Choose a different gas station if the pump doesn’t take chip card or tap-to-pay. Don’t use the magnetic stripe!

Chip cards are significantly more secure than the magnetic stripe.  If the reader is a chip card reader, or if you’re using tap-to-pay, your account number never leaves your card unless it’s first encrypted.  The chip inside the card ensures that.  This means, even if someone attempted to read your account number using the chip or tap, they wouldn’t be able to, they would only get the encrypted information.

It’s not necessarily easy.  In the US, it’s common practice at restaurants for the waiter to take your card to their station for payment processing rather than bringing a terminal to your table (though bringing terminals to the table is SLOWLY becoming more common).  You may not have a choice, but you can ask – ask the waiter if they can bring a terminal to your table, ask if you can pay at a register, and ask if they are using chip card.  Tell them you don’t want your card swiped.  Tell them you’ll choose another vendor because the other vendor is taking security more seriously.

A stolen card is not much of an issue to the merchant, but it creates big headaches and big time sinks for you and me, the consumers.  Secure technologies like chip card and tap to pay, ARE available.  Chip card and tap to pay protect you, protect your information and virtually eliminate the chance that your credit card number can get stolen.

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