The US is the last country to convert to chip-based credit cards. Other countries have been using them since about 2003. The technology is actually 1990s technology.
Well, here I am in Asia and my card has been cut off because of fraud. It’s a huge hassle to not be able to use a credit card for a week. But the bigger grumble I have is that I shouldn’t be having fraud on my card because it’s a new chip-based card.
Well, somebody skimmed my card number, probably from one of the merchants that still uses a mag-stripe reader. Using only the card number and information printed on the card you can make a mag-stripe card in your garage. They just omitted the chip feature from the clone and went shopping for some of new Apple macs.
The crooks bought about $10,000 in computers. The credit card company made about $350 in profit from this transaction. Apple will end up eating the entire cost of the fraud because the banks will reverse the charges back on Apple. (Plus charge Apple $10 to $50 in addition). The banks will also keep their 3.5% so Apple essentially paid $350 for the privilege of having $10,000 stolen from them.
What angers me is that if the US banks would use a PIN on transactions this would never have happened. The crooks wouldn’t know my PIN. But US banks won’t even allow me to pick and have a PIN on my card. It is as if they worry about stopping fraud and want to encourage it. Oh, right, fraud is profitable for banks so of course they don’t really want to stop it. If they had given me a PIN they wouldn’t have made this $350 profit because the fraud would never have happened.
What good are the new security chips if a fraudster can still just take a photo of the card and them make a cheating copy? They aren’t much good is the answer.