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PayWave technology is making it easy for criminals to use stolen bank cards for their own financial gain, a judge says.
However, banks say there are measures in place to track fraudulent spending and safeguards to prevent customers from losing out.
Last Thursday, Jacob William Douglas Thompson pleaded guilty to two charges of using a document for pecuniary advantage when he appeared in the New Plymouth District Court.
On June 5, Thompson got hold of a man’s stolen ANZ bank credit card, which was enabled with the payWave technology. The 25-year-old then used the card four different times to purchase items totalling $154, including tobacco and petrol.
PayWave or contactless technology allow users to pay for items by waving their card over a secure electronic machine, instead of inserting or swiping it. Purchases up to the value of $80 can be made without the need for a pin number. Most of New Zealand’s banks now offer the facility to its customers.
During Thompson’s hearing, his lawyer Paul Keegan described the technology as “stupid” and that it provided offenders with direct access to people’s bank accounts without bypassing any security measures.
Judge Chris Sygrove agreed and said while the new technology made purchasing much easier for customers, it provided a handy advantage to criminals as well.
“It’s too easy to wave this card and get credit,” he said. Sygrove sentenced Thompson to 12 months’ intensive supervision.
In July, another New Plymouth man Philip Temutanga Tahu was also prosecuted for using a stolen credit card, which also had the contactless technology. He used the card to buy petrol and other groceries to the tune of about $120.
A spokesperson for ANZ Bank said cards with the contactless capability were proving “highly popular” for their customers.
“Transactions are covered by our fraud monitoring tool which quickly picks up unusual patterns of card use. Where any fraud does occur, cardholders are reimbursed for any losses that are not their fault,” he said.
Use of the technology was also something which was on the rise at TSB Bank.
“Since the implementation of payWave we have seen a continual increase in its use and, contrary to what people expected, we have seen a reduction in fraud through stolen cards since the adoption of the technology,” a bank spokesperson said.
“We also advise customers to check their monthly account statements and if they see any irregular transaction to give us a call right away so that we can investigate the situation. If any unauthorised or fraudulent transactions occur on a card the customers will have no liability to the bank.”
Eftpos Specialist (Taranaki) Lid director Damian Muir said payWave technology was a convenient tool for customers and while not all businesses had taken up the opportunity to use the facility, it was most commonly used in the hospitality and retail sectors.
“It’s quick and easy,” he said.
Paymark, which manages the majority of the country’s electronic spending, says of its total number of transactions every year, about 11 per cent of them were related to the use of a contactless credit card.