Hi-tech criminals target cards
Billions of dollars worth of New Zealand credit card transactions are at risk from a new breed of hi-tech pickpockets armed with electronic skimming devices available online for less than $100.
The devices - sourced from China - target the latest credit cards incorporating wave-to-pay technology, and can empty your card balance without you even realising.
While New Zealanders have yet to be caught out by the new technology, both police e-crime boss Maarten Kleintjes and Hamilton electronic point of sales company Eftco owner Alex Castle reckon it is just a matter of time.
And with New Zealanders spending about $4 billion a month on credit both men are warning holders of contactless credit cards to be on their guard.
The scanners use radio frequency identification (RFID) technology to read the information stored on credit card microchips within a range of about 8cm.
"The technology exists. It's new technology.
"The good thing about being in New Zealand is that everything happens a year or so later than in the rest of the world," Mr Kleintjes told the Waikato Times.
A YouTube clip shows an American electronic security expert demonstrating how easy it is to harvest credit card details from a passerby in a shopping mall with the $100 credit card scanner, and cloning the details on to an electronic hotel key which he then uses to pay for a meal.
"If people do tend to steal something they don't steal very much," says David Tripe, director of Massey University's Centre for Banking Studies.
Dr Tripe says scammers are likely to steal several small amounts that card owners would be unlikely to notice.
"If you lost the odd $5 to somebody buying Big Macs it's not the end of the world."
Mr Castle became concerned for consumers when he tried a new mobile contactless eftpos scanner at his Frankton business about a month ago.
As he wandered among staff with the new scanner he was able to debit $2 from each of their cards by waving the machine at them.
"We tried putting our cards in our pockets and it still worked," Mr Castle said.
"People need to be aware that this kind of credit card skimming is possible and they need to be getting anti-skimming wallets," he said.
The wallet, made from a wire mesh, forms a barrier preventing the scanner connecting with the credit card.
Michael Bilello, president and chief executive of Centurion Strategies in Florida, told the Times millions of contactless cards had been issued around the world and the threat was global. He said sleeves could be bought online and wrapping the card in tinfoil had the same effect.
Visa NZ country manager Caroline Ada said in a statement that even if a fraudster should "read" the information from a contactless transaction, the information would have limited use.
There had been no reports of fraudulent reading of Visa payWave cards in New Zealand.
"Only minimal account information is stored on a Visa payWave card, which is less than traditional magnetic stripe cards or contact chip cards. In fact, newly issued Visa payWave cards do not even transmit the cardholder's name during a transaction," she said.
"Visa payWave cardholders are protected by Visa's zero liability policy, which protects all Visa cardholders from unauthorised purchases.
"We recommend that cardholders check their statements regularly and contact their bank if they are aware of any fraudulent activity."
In a statement to the Times, MasterCard claimed it was "nearly impossible" to duplicate a card.