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Smart Chips Can't Protect You from Yourself

If you have received a new credit card or bank card in the past two years, you probably have noticed the gold chip on the left side of the card. These cards, usually known as smart cards or chip cards, are part of the EMV standard of payment and security. EMV stands for Europay, Mastercard, and Visa. These are the three companies that pioneered the use of chip cards. Because of its overwhelming effectiveness at stopping hackers from stealing sensitive data, chip cards have now become the industry standard. There are still a number of circumstances in which smart chips can’t protect you:

Chip cards are more effective than their predecessors.

In the 80s and early 90s, credit cards would be imprinted onto a carbon piece of paper that the customer would sign off on. By signing the carbon paper, the customer authorized the vendor to charge money from his or her account. This method proved to be unsecure and problematic, as it produced pages of sensitive credit card details. If someone misplaced or did not properly dispose of your credit card slip, a thief could use your carbon paper to steal information. As technology progressed, we moved away from carbon copies and shifted to magnetic strips. Up until the last decade, magnetic strips have been relatively safe and effective. Your credit card details are inside the strip and are transmitted to a computer or machine after swiped on a card reader. Unfortunately, as technology has progressed, so has criminal ingenuity. There are now a number of third party programs, or devices attached to card readers, that save your sensitive information and send it to high-tech thieves. To combat the surge in credit card fraud, many financial institutions around the world have adopted cards that meet the EMV security standards. Embedded smart chips help protect your information by encrypting all of your sensitive banking information. Even if a credit card thief was to use a device to record your transactions, the file containing your sensitive banking information would likely be unrecognizable gibberish. Smart chips have been overwhelmingly successful at fighting credit card fraud. Because of this, the government has issued a statement requiring all vendors to switch to updated card readers so that they comply with EMV security standards. Vendors who fail to comply will be responsible for reimbursing customers for damages caused by credit card fraud. However, replacing credit card machines can be time consuming and expensive. Big corporations like Costco, Wal-Mart, and Target can easily comply with these regulations. However, this can prove to be a difficult task for many small, independent companies. In addition, approximately 60% of Americans are still swiping their magnetic strips with every purchase. In order to accommodate all customers who pay by card, companies must use card readers capable of reading magnetic strips and smart chips.

Smart chips can’t protect you from credit card theft.

Financial institutions across America are urging Americans to quickly switch over to cards with smart chips. Criminals are capitalizing off of this opportunity by scamming unwitting victims. Credit card thieves have sent out emails to various people claiming to be financial institutions. In these emails, the scammer asks for sensitive information like social security numbers and passwords. The scammer tells the victim that this information is needed in order to issue an updated credit card. In actuality, the scammer takes the sensitive information and uses it to make purchases in the victim’s name. Here are some ways that you can better protect yourself from credit card fraud:

Banks will never ask you for sensitive information over the telephone or by email.

Banks already have all of your information on file. If they are trying to verify your identity, they could ask the last four digits of your social number, but never your full social security number. Anyone claiming to work for your bank or creditor is asking for your personal information should immediately raise a red flag.

Many of these emails look as if they are professionally written.

The writing may be eloquent and grammatically correct and could be photos of your bank’s emblem. Just because an email looks official doesn’t mean that it is official. Thieves can spoof email addresses and design websites that look remarkably similar to your bank or credit card company’s website.

Never click links in an email.

Many of these links take you to pages that force your browser to download malware that records your information. Other links can take you to websites asking you to complete forms, usually requesting your password and social security number.

Only use your bank’s official website.

Don’t log into any unfamiliar website claiming to be affiliated with your bank. It is unlikely that your bank’s website has changed or moved. If you think that it has, call your bank’s regional or corporate office and confirm before logging in. Anyone can be a victim of credit card fraud. However, you can greatly reduce your chances by being smart and cautious about who you give information to. By using the secure cards and being cautious about your personal information, you are better protecting yourself from identity theft.