Meet our writers

 







Money January 2013

Dollar Sense

Is Your Wallet Reaching Out to Thieves?

By Teresa Ambord

So imagine if you were standing in line, with your debit or credit card in your back pocket. All someone with the right device would have to do is casually pass this machine within one foot of your pocket, and boom, your credit may be stolen.

ps_ambordForget pickpockets. Only an amateur thief would risk physical contact to steal your wallet – which may contain nothing of real value – when he or she could pass close by you, and capture all the necessary information off of credit or debit cards you may be carrying. A tiny device built into your cards by your bank or credit card issuer is the key.

It’s called an RFID chip, which stands for radio frequency identification. You’ll know if your cards have these chips because they will say something like “pay pass,” “pay wave,” or “blink,” or have a symbol that looks like radio waves. If your cards have not been replaced for a while, chances are you are okay. But experts say, eventually you will receive new cards and they will contain RFID chips.

 

Why RFID?

Faster purchasing. Evidently some consumers are willing to risk their security to save 20 seconds at the cash register. The RFID chip allows you to complete your purchase by simply waving your card at the machine instead of sliding it through the slot, entering a PIN or password, and/or signing your name (all of which is actually pretty fast).

Credit card issuers say the RFID-imbedded cards are safe. But one skeptic took it upon himself to prove them wrong. For about $150 he purchased a device over the Internet that allowed him to demonstrate. Using volunteer “victims” he was able to copy their information from cards they were carrying. He showed them the information he had and they verified that indeed, it was correct.

Another amateur investigator purchased a machine for $100 and did the same. In a Youtube video he also demonstrates the process to willing participants. In one instance, he transferred their credit information, not to a credit or debit card, but to a hotel key card. Then he walked over to the cafeteria cash register where he and the credit card owner were filming the event, and made a purchase – using a hotel key card. Not only did the purchase go through and show up on the bill of the credit card holder, but the cashier didn’t even question why he was making the purchase with a hotel key card. Such is the world of purchasing these days.

The machines that these men used to capture the credit information resemble large wallets. So imagine if you were standing in line, with your debit or credit card in your back pocket. All someone with the right device would have to do is casually pass this machine within one foot of your pocket, and boom, your credit may be stolen. With a scenario like that, you can see that a thief would not even have to know you have a card with you. Unlike old-fashioned pocket-picking, a phishing expedition costs the thief nothing but it could cost you plenty.

 

What Can You Do?

The fix is easy, really. You can call your credit/debit card issuers and ask for cards without chips, although as mentioned earlier, eventually they will all have RFID. So, it’s up to you.

Department stores sell simple sleeves that you can slip into your wallet that prevent the capture of your information. Or you can wrap your cards in a piece of aluminum foil. That can be awkward, but it is effective and cheap. Fraudpreventionunit.org reports that there is an even simpler fix, which is to carry more than one card that has an RFID chip. The theory is that this creates a jumble of information that is worthless to thieves. So you are at greatest risk when you carry only one RFID-imbedded card with you.

Fraudpreventionunit.org also adds another bit of positive news. While the machines that are meant to steal information can capture most of it, one bit that is not captured is the three digit verification code. That will limit, but not eliminate, the ability of a thief to use your information. Again, credit card issuers insist their cards are safe. But they have a vested interest in you using their cards to the max. That’s why they are imbedding these chips in your cards whether you want them or not.

The fix is simple enough, but it is up to you.

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

Meet Teresa