Contactless cards – how to avoid contactless card fraud

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An increasing number of us use contactless cards to pay for things – shopping, takeaway coffee or travel tickets. Using contactless cards can be convenient, but it’s not risk free. Find out how to avoid contactless card fraud.

Using contactless cards

Figures from UK Finance show that almost two thirds of us are now using contactless cards. The number of contactless payments doubled in 2017 and is expected to rise faster in the future.

Paying with contactless cards is quicker than having to tap in your PIN. It can also be more convenient than paying with cash. But some people worry about fraud and others may be at risk of being overcharged or of not being able to check their recent purchases.

Paying with a contactless card

You can only pay for something ‘contactless’ if your debit or credit card is contactless and if the shop accepts contactless payments.

SAVVY TIP: Your card is contactless if it has the contactless logo on it. The logo is four curved lines – similar to a sound wave or ripples. It’s like the Wi-Fi symbol, but turned sideways.

When you pay by contactless, you simply tap your card on the retailer’s card reader. Make sure you tap the end of your card that has the chip in it onto the card reader, otherwise it may not be read correctly.

SAVVY TIP: If you use your contactless card to pay for travel on the London Underground, the card reader is much bigger so you just have to tap your card on the reader (you don’t even have to take it out of your wallet). Be aware that if you have more than one contactless card in your wallet, the card reader may not know which card to take payment from. In the worst case, with a return journey, you could end up being charged maximum fares on different cards.

How much can you pay using contactless?

You can pay for things costing up to £30 using your contactless debit or credit card. If you want to buy something that’s more expensive, you’ll have to tap in your PIN. You should be asked to input your PIN every so often, but it may not be that frequently.

SAVVY TIP: When contactless cards were first introduced, banks asked customers to input their PIN every three or four transactions. But (having just carried out an unscientific Twitter poll!) our research shows that it’s less often than once every 15 transactions.

Banks say that they have more sophisticated technology that can spot potentially fraudulent transactions. This means that they don’t have to ask us to input our PIN so often. However, it does also mean that your card could be used quite a few times if it’s stolen – without the fraudster needing to know your PIN.

Check you’re charged correctly

When you pay with contactless, check the amount you’re being charged. The transaction is so quick that you may tap your card before you’ve realised exactly what you’re being charged for. Take a second to check.

A couple of years ago, a company called PaymentSense carried out an experiment in London. It set up a fake pop-up coffee shop to see whether people noticed when they were being overcharged. The staff at the coffee stall deliberately typed in the wrong amount when people paid by contactless card. They also gave them the wrong change if they paid by cash. Only two people spotted straightaway that they’d been overcharged.

You may not be offered a receipt if you pay with your contactless card. But I’d recommend getting one every time when you pay by contactless. Contactless transactions can show up on your statement a day or two after you spent the money. I’ve heard of some cases where the transaction didn’t show up until four days later. If you do’t have a receipt, you might not recognise the transaction when you check your balance or statement.

How to avoid contactless fraud

There are two main fraud risks when using your contactless card:

  • That someone steals the card and uses it. In some cases they can continue using contactless cards even after they’ve been cancelled by the bank.

SAVVY TIP: It might seem odd that a card can be used after it’s been cancelled. The explanation I’ve read is that contactless transactions can be made online or offline. What that means in English is that if a shop processes payments online, then your card makes contact with your bank as you pay. But some businesses process payments offline, which means your card doesn’t contact your bank at the time, but the payments are processed in a batch later. That’s when someone can use a cancelled contactless card and the payments could still go through. Having said that, your bank must refund any money that’s been taken or spent fraudulently.

  • That someone intercepts the card or uses a dodgy card reader to take a payment from your card, while it’s in your wallet or purse. I’m not a tech expert, while it’s possible to intercept a contactless card, I’ve not yet seen the evidence that fraudsters use this as a way of stealing money from someone. That doesn’t mean they aren’t or won’t in the future.

SAVVY TIP: You can buy contactless card wallet protectors which cost from £9 to £29. Several sheets of tin foil will – apparently – work just as well!

As with all credit and debit cards, try and keep your contactless card safe. Treat them like cash. And bear in mind that if someone steals it, they may be able to use it multiple times before they’re stopped. Your bank has a duty to repay money that’s been taken fraudulently, but it’s obviously better to avoid the hassle of having to reclaim it in the first place.

Related articles:

Online-only banks – six digital-only banks

Five bill paying apps to help you pay and manage your bills

If you’re travelling in London, you can pay using your contactless bank card

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