Published: 20:05 EST, 21 May 2013 | Updated: 05:49 EST, 23 May 2013>
An urgent investigation has been launched into the new generation of contactless bank cards amid fears thousands of shoppers could be hit with phantom charges.
Concerns over the security of these cards have been raised by customers of Marks & Spencer who claim payment was taken from their contactless debit or credit cards when they didn’t try to use them.
Contactless cards are being touted by banks and retailers as the most convenient way to pay for goods worth £20 or less.
They are credit or debit cards which have a special chip and an antenna which sends out a weak radio wave. If you’ve had a new bank card in the past year, you’ve probably got one already — and you can spot a contactless card by the radio wave symbol on the front.
You pay for your goods by waving this card over a special reader next to the till which picks up the radio signal and takes money from your account in an instant. The card will not be registered if it is waved too quickly or the scanner is more than 5cm away.
There is no need to enter a PIN and the money can be docked even if your card is inside a purse or wallet.
Most banks now send out cards enabled with contactless technology whenever an account is upgraded, or a card is replaced.
Among those that don’t regularly issue them are Santander and Lloyds TSB. No Nationwide customers have been sent them.
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There are 232,000 contactless terminals in the UK in retailers including M&S, the Post Office, Starbucks, Boots, Pret A Manger, McDonald’s, Waitrose, Caffe Nero and Subway.
Although they were first launched in 2007, major banks have only just started sending out these cards en masse.
There are 32.5 million contactless cards now in circulation, and 70 million payments will be made using them this year.
Until now, errors have been rare: just eight in total have been reported by trade body the UK Cards Association.
But following claims that incorrect payments have also been noticed at sandwich chain Pret A Manger, Visa Europe, which processes card payments, and the UK Cards Association have launched a probe.
They say the technology is not to blame and believe that the cases are isolated.
However, there are fears that many people may have been charged twice and simply not noticed the duplicate payment on their bank statement.
And Ross Anderson, professor of security engineering at Cambridge University, who has exposed previous flaws in chip and pin, says that no technology is immune to problems.
He suggests some retailers may not have set up their tills properly. As a result, these tills may accidentally take contactless payments when someone also pays by chip and pin.
On the rise: There are now 32.5 million contactless cards in circulation.
Professor Anderson says: ‘If they don’t work very well together, a system could take a payment for both. The worry could be that, like chip and pin, banks start to refuse to pay up in disputes.’
He also suggests the position of contactless card readers themselves could be to blame.
‘Some of these machines are at waist level, which can make it easier for the wrong card to be debited. It’s far better for them to be on a stalk at chest level.’
For this reason, there are concerns that some shoppers may have accidentally triggered a contactless payment when they had intended to pay by chip and pin and put their card close to the scanner by accident.
There is one very good reason why banks are so keen to issue this technology: last year, a survey by MasterCard suggested people spent nearly one-third more using their account once it had a contactless capacity on it.
This was because the convenience of small transactions encouraged greater spending.
To avoid stolen cards being used, cardholders will occasionally be asked to enter their PIN. A spokesman for Visa Europe says a request for a PIN will typically be made after five or six consecutive contactless transactions.
If a criminal does take your card and spends on it, you are protected under the same fraud rules as other transactions.
That is, provided you are not at fault, then you should be entitled to a full refund. (In each case so far, M&S has repaid the full amount.)
And as fraudsters cannot withdraw cash, or purchase high-value items, potential losses to the banks could be limited — meaning they should repay stolen funds swiftly.
The problems reported so far are believed to have occurred when shoppers have placed a bag or handbag containing a contactless card close to a card scanner when they have been paying with an alternative card or cash.
The shoppers noticed the duplicate payments at the tills or on their statements.
Richard Koch, director at the UK Cards Association, insists there is no problem with the technology.
He says: ‘A contactless payment won’t go through unless it’s 5cm or closer — that’s the way the technology is designed.
‘What may have happened is that somebody has inadvertently put their purse down near the reader, and the contactless card will have been picked up.’
He also conceded that store staff needed to be better trained. ‘When you pay by contactless card, staff need to press the right button in order that the store’s card reader picks up your card signal.
‘If they mistakenly press it, or leave that on for too long, it could be the case that the wrong payment is made.’
HOW TO AVOID ACCIDENTAL PAYMENTS
- Keep your bag, wallet, purse or any pockets containing cards away from the scanners.
- If you’re paying by contactless card, always take your preferred card out of your purse or wallet to pay. If you have more than one contactless card in your wallet, the reader will pick up the closest, so make sure you hold your wallet appropriately. Several bunched together can mean none will work.
- You can refuse to accept a contactless card at some banks. However, some — such as the Co-op — won’t let you hand one back if it has already sent you one.
Source : http://www.thisismoney.co.uk/money/saving/article-2328578/How-safe-new-contactless-bank-cards.html