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Originally Posted by dizbuster
Would these new cards with CHIPs on them stop this kind of credit card fraud ?? I understand you can copy the data on a magnetic stripe but I'm led to believe that it's not possible to do the same with the CHIP which means I now only ever use my credit card abroad when I see a PIN + CHIP machine where I put the card in and take out myself, i.e. the shop assistant doesn't ever have to touch my card.
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The chip does stop some fraud but it only applies to ATM machines and any shops where they have a dedicated chip reading credit card machine. That is unfortunately not very widespread yet because the cost of these machines are pretty high for the merchants. Also the chip system is still flawed and causes many problems outside ATM's.
The chip wont stop cloning or skimming fraud though. All you need is basically the card number and the CVC (3 security digits on the back of the card) and then you can shop online with the information. Also if I was to do some credit card fraud I would copy the information from one Visa card over to my own Visa card and basically overwrite my own. Then i could just pay for hotels etc. with my own card, with my name on it, but the card number (and therefore account) would not be mine and I would be getting free stays. The only way to see this is if the person behind the counter actually compares the credit card number on my card with the credit card number printed on the receipt - Not many people do that.
I my self have one of these cloning machines that I use for my job. After I received it (bought it for 199 Euro and received it two days after) I copied my Visa information to an old library card I had and went to a supermarket where I knew the manager. I did my shopping and when I was about to pay I asked him if I could pay with my library card. Naturally he just laghed because he knew it wasnt possible, but imagine the expression on his face when I swiped the card, entered my PIN and the transaction went through
Since it was an identical copy of my own Visa card the amount would of course be withdrawn from my own account but the look on his face was just priceless lol.
The credit card companies have many tricks up their sleeves for fighting fraud, but nothing is 100% secure. Verified by Visa is one of the anti fraud messures but not many online shops participate in that yet.
And you can also be sure that the fraudsters will find a way to copy and decode the information stored on the chip. The chip operates on the same principles as the chip cards used in satelite receivers and people have been breaking those for ages now.
The chip is better than nothing though - one big mistake the credit card companies made in Denmark when they introduced it was to remove the mandatory picture on the card instead. They felt that they didnt need that anymore but they are soo wrong. Since that the credit card fraud in the Danish nighlife has incresed by 300%. Basically people go to the bar and buy bottles of booze, pay with their credit card and on the monday they call the bank and reject the charges. Because there is no picture on the card the bartenders have no way of making a positive ID on the card holder.
Do you guys still have pictures on your chip cards?