Europay MasterCard and VISA (EMV) Chip Fraud

While many people believe the security of their credit and debit cards has increased because the banks and card issuers added EMV (Europay MasterCard and VISA) chips to the cards, this may not in fact be true. Although the EMV chips make it more difficult for criminals to skim the information on the card and create a duplicate card the criminals have developed a new fraud scheme to take advantage of the vulnerabilities of the EMV chips. These chips are radio frequency identification chips (RFID) and you can pay for a transaction by waving the EMV chip card over a point-of-sale transaction device designed to capture the RFID information. What most consumers don’t know is that the chips in a smart card can be read at distances up to three feet away.

The criminals are aware of the new chip card’s vulnerability and they use portable, battery operated, point-of-sale devices to capture the information broadcast by the smart cards and process card present transactions. The criminals go to crowded areas such as malls, sports venues, subways, busses and other public places carrying these portable devices and have them automatically process a card present transaction for under $50, which is the federal legal limit for the amount of a fraudulent transaction that is the responsibility of the consumer. For fraudulent transactions over $50 the card issuer is responsible for the transaction. When consumers attempt to dispute these transactions some card issuers will argue that since the card was present, and you still have possession of the card, it must be a legitimate transaction. They may even imply you just forgot about it.

Consumers need to protect themselves from this type of fraud. If you have a smart card with an EMV chip you need to carry the debit or credit card in an RFID sleeve or an RFID safe wallet. RFID sleeves and RFID safe wallets have a lead lining that prevents portable point-of-sale devices from reading the RFID chips while you are carrying your card in your pocket, wallet or purse.

About Dr.Bob

Dr. Minniti is the President and Owner of Minniti CPA, LLC. Dr. Minniti is a Certified Public Accountant, Certified Forensic Accountant, Certified Fraud Examiner, Certified Valuation Analyst, Certified in Financial Forensics, Master Analyst in Financial Forensics, Chartered Global Management Accountant, and is a licensed private investigator in the state of Arizona. Dr. Minniti received his doctoral degree in business administration from Walden University, received his MBA degree and Graduate Certificate in Accounting from DeVry University’s Keller Graduate School of Management, and received his Bachelor of Science in Business Administration degree from the University of Phoenix. Dr. Minniti teaches graduate and undergraduate courses in accounting, fraud examination, fraud criminology, ethics, forensic accounting, external audit, and internal audit, at DeVry University, Grand Canyon University, Northwestern University, and the University of Phoenix. He designed graduate and undergraduate courses for Grand Canyon University, Northwestern University, and Anthem College. He is a writer and public speaker. He has experience in forensic accounting, fraud examinations, financial audits, internal audits, compliance audits, real estate valuations, business valuations, internal control development, business continuation planning, risk management, financial forecasting, and Sarbanes-Oxley compliance work. Dr. Minniti is an instructor teaching continuing professional education classes for the American Institute of Certified Public Accountants, Compliance Online, CPE Link. AccountingEd, Global Compliance Panel, Clear Law Institute and various state CPA Societies.

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