The new credit cards with the chip in them are being proclaimed as the solution to our credit card worries. But, just as we discussed over the last two days, the reality doesn’t match the claims.
These new cards will provide more protection from fraud when presented at a store and used in the chip-reading terminal if the customer enters their PIN.
However, fraud will still occur, even when using the chip.
In addition, these cards can still be used by the old “swipe” method. That defeats the security of the chip-and-PIN technology.
The data on the magnetic strip that is still on these cards can still be stolen just as it has been in the past. While it is harder to counterfeit the chip, it is not impossible. But one doesn’t even need to counterfeit the chip to use your stolen data. It could be put on an old-style card. But, what about phone orders or using your stolen data online? The chip doesn’t protect you against that.
The new cards put the cardholder at risk in a way that didn’t occur with the old cards. The banks may no longer protect you if fraud occurs. You may be able to get your money back from the merchant, but that may be harder to do than it used to be with the banks.