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Why you should be cautious about contactless

25th Jul 2018
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Contactless card

We accountants have a reputation for being cautious. When it comes to using contactless credit and debit cards, perhaps that caution is well-founded.

The starting point is that contactless seem to serve no purpose beyond saving between five-to-10 seconds on a transaction. The last sentence might seem naïve, given that so many people seem unable to remember their pin numbers, but frankly, if someone is unable to remember a four-digit number that they use on a constant basis, are they really safe to be let loose with a credit card?

One of the main reasons for using these cards has always been that they were secure. If you carry cash around, it could get stolen or with the shiny new plastic tenners, bounce merrily out of pockets.

Cards might get stolen, but even when they did, banks would usually cancel them and they would be no use unless someone can get a pin number or, more rarely these days, forge a signature.

Contactless is completely different. Effectively, anyone can beg, steal or borrow your card and make hay while the sun shines (and what a wonderful summer it has been). The argument is that with a limit of £30 per transaction, nobody cares too much about the amount that they lose. That is a pretty weak attitude to fraud.

In any event, £30 is only the tip of what could be quite a large iceberg. I typically carry around not only a debit card and a credit card but also a second credit card, as the first one can be a little temperamental and it is embarrassing to be stuck in a restaurant with no means to pay.

My bank has recently added cashless to my main credit card without consultation. As a result, now if anybody steals my wallet, they can instantly purchase £90 of goods. In a shopping centre they could probably multiply this up tenfold within an hour, although possibly bank security may step in at some point (or possibly not).

There is also a much greater risk of temptation and casual theft. It might be showing a very negative (ie accountant-style) view but it would be extremely easy for the kids or others to borrow your card and spend the odd £30 now and then, quite possibly without your even noticing it. That is ignoring the wilful a fraudster with a scanner who gets up close and personal, skimming cards to your cost.

I haven’t personally had any experience of fraud of this type yet but it must be a regular occurrence. One issue is that many may not bother to try and get their money back if the amounts involved are relatively small. However, it would come as no surprise to learn that banks are beginning to play hardball and saying that any fraud involving contactless must be due to negligence by their customer, unless the theft has been reported to the police. That would seem to be a perfectly reasonable attitude and potentially moves liability from the banks to you and me.

In some ways, it would be good if this article led to indignant responses from banks, other accountants and any general readers, since there must be some wonderful benefits to contactless that this writer has completely overlooked.

Replies (16)

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By Peter Anderson
25th Jul 2018 11:39

You underestimate the time saving as you can start packing up / leaving as the transaction goes through rather than having to stand there with your card in the machine. A queue goes much quicker if a few are using contactless.
Banks take the risk of the fraud.
Actual fraud rate using contactless is apparently low, for example see this article:
Your objections seem to based on fears of what might happen not facts of what has happened.

Thanks (4)
Jennifer Adams
By Jennifer Adams
25th Jul 2018 17:05

Its not just the quickness of use. There are other benefits e.g someone cant look over your shoulder and make a note of the pin number. I know of an elderly person who carries her number in her purse (yes... I know...).
Personally I never carry any cards other than one Debit card. My attitude being - if the cash is not in my account then I wont buy it. I have one credit card for online purchases - kept at home.
You can report your card lost or stolen to your bank by mobile apps (assuming that you are aware that it has been stolen of course!) and that should reduce the loss.
Some banks offer a Card Protection insurance (e.g Lloyds) with their other incentives but there is a fee.

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By possep
26th Jul 2018 15:23

"The last sentence might seem naïve, given that so many people seem unable to remember their pin numbers, but frankly, if someone is unable to remember a four-digit number that they use on a constant basis, are they really safe to be let loose with a credit card?"

It's a PIN not a PIN number. Personal Identification Number. It can't be Personal Identification Number Number can it! Should you be let loose to judge when you can't get that right.

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Replying to possep:
By Michael C Feltham
27th Jul 2018 19:07

Couldn't agree more A personal constant annoyance.

As are even on what one might hope are better informed newscasters on TV. No hope!

A thoroughly irritating error to myself is to constantly hear a TV presenter/newscaster say "Tescos."

Tesco's what I cry?

Etc. A nation, today, of illiterates...

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Replying to Michael C Feltham:
By keithas
09th Aug 2018 13:43

Tesco's supermarket.

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By alan.rolfe
26th Jul 2018 16:46

Tin foil hats on!

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By prolison
27th Jul 2018 11:06

There are safeguards in place should a contactless card be stolen. I recently had my card declined when trying to a contactless transaction. On enquiry with HSBC, they explained that there is a limit of £100 spend of continuous contactless transactions. Once this is reach the cardholder needs to a do a pin based transaction to reset the £100 limit. This is a good safeguard - I am sure this is offered by other providers, so worth exploring!

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By Michael C Feltham
27th Jul 2018 19:36

Cards are totally safe...........heard it all before.

Whenever banks or indeed ANYONE boasts how secure and unbreakable their systems are, then I am minded to recall the tale of The Grabber.

A very clever electronics engineer became incensed when car companies boasted how and why their new generation immobilisers/anti-theft devices were "Impossible" to beat.

So the man designed and built the grabber: the idea was an operator hid and when a driver activated his/her remote keypad, the operator set the device to Receive and when the driver had gone, simply set the grabber to Transmit, pressed the go button and the car's security systems were disabled!

The Grabber was originally aimed at finance recovery people and mobile locksmiths: not long before criminals used them!

Banks, particularly, have a notorious history concerning lax security.

Buy yourself an ally credit card wallet; as criminals can even clone your contactless RFID cards when they are in your bag or wallet.

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By Knight Rider
30th Jul 2018 09:57

Anyone queuing outside Greggs for some coffee and a sausage roll while the people in front fumble with £20s and small change will see the benefits of contactless. Just like cash they need to be kept safe and used responsibly.
There are checks put in place by the banks - transaction size and number. Let's welcome the contactless option and hope the banks can stay ahead of the fraudsters.

Thanks (2)
Replying to Knight Rider:
Red Leader
By Red Leader
31st Jul 2018 11:34

I'm sorry but your credibility was completely shot to pieces when you admitted you went to Greggs.

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Replying to Red Leader:
By Knight Rider
03rd Aug 2018 14:22

Is your objection the quality of the food or their avoidance of VAT? Quite partial to a sausage roll,doughnut and coffee.

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By tracey2412
09th Aug 2018 11:46

Couldn't agree more with the OP. When our personal debit cards (we have 6 with the same bank) started arriving with contactless icon, we sent them back and requested non-contactless ones. The bank duly obliged & replaced them all. I did the same with my Mastercard (different provider).
My business debit card (same bank as my personal ones) was recently renewed & they sent a contactless one but this time I am told that you cannot have a non-contactless business card. My argument is that a business debit card is less likely to be used for <£30 and you ALWAYS need a receipt, so why would anyone want a contactless business debit card? There seems to be no logic except someone thought the icon looked pretty? (sorry!)
I was told that if a card was used fraudulently (and it apparently does block after 3x in a day), they would refund. My reply was - I don't check my bank every day & I don't have time for the hassle & aggravation - if it was used - of then contacting them to report it, prove it wasn't me & get the money back. Who needs that stress? I would rather it not happen in the first place.
Then they told me - and I still don't quite believe this - to buy an RFID purse to keep my cards in. I have a purse - it is a good purse, works well, I like it, it was a present & has years left in it - WHY do I want to buy another one because the bank decides I MUST have a contactless card?
The only problem we have encountered with the non-contactless debit cards is that the pay-at-pump fuel kiosk won't accept them - even though you have to put a PIN in. Neither Tesco nor the bank can explain why. So I have to use a credit card to buy fuel. Small pain.

I like progress, I love (most) technology, but I prefer to make my own decisions.

And lastly (I promise), at minimum 3x£30 a day, it is easy to lose track of what you are spending - especially young people or those not so savvy with money. My son has frequently been skint cos he 'forgot' he bought this & that. Is that the underlying motive by the banks - to encourage overspending? Or am I being cynical?
You probably stopped reading ages ago, but if you haven't - thank you - my rant is over! I will get down from my soap box now.

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By pharvey
09th Aug 2018 12:28

No need to send your Contactless Cards back to the Bank for Standard ones - a Contactless Card has an embedded aerial a few mm in from the edge that encircles the perimeter of the card. This is just a copper braid so just make an approximate 10mm slit in the opposite end of the card to the surface mounted chip and the Contactless element will be ineffective without disabling the Contact part of the card.

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By meadowsaw227
09th Aug 2018 12:59

I try never to use debit or credit cards when I am out shopping/on holiday etc.
Preferring to pay cash for everything, only I know what my spending habits are.

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By Charlie Carne
09th Aug 2018 14:22

Sorry to be blunt, but this is Luddite. It is MUCH quicker, allows use on transport systems, such as London tubes & buses (which can't take Chip & PIN), and the banks will cover any fraudulent use. And, if one day the banks refuse to cover it, then their assurance that contactless is safe will be shot and we can all send the cards back. A wallet with protective cover will prevent RFID skimming but, if you're that worried, then use Apple Pay or Android Pay, as this has all the advantages of contactless (quick and no PIN required) whilst being completely safe, as the phone (or linked watch) requires a fingerprint to let it work. I use contactless for almost every transaction I make (as there is no £30 limit on Apple Pay due to its increased security) and I would be most annoyed to revert to other payment methods.

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By Robbo
09th Aug 2018 15:10

The only advantage I can think of is as an occasional visitor to London who doesn't have an Oyster card it can be used on the underground.

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