In just that past 6 years, identity thieves have stolen more than $107 billion dollars from consumers nationwide, according to the 2017 Identity Fraud Study.
To help crack down, banks and retailers started using credit cards and debit cards with chips and chip card readers, but why aren’t all retailers using the chip readers?
It’s no longer a swipe of a card; it’s now an insert and wait.
Heather Head said she knows the feeling all too well.
“It was just five months of consistently doing things to get it cleared up,” Head said.
She was one of more than a thousand identity theft victims last year in Ohio.
“They knew everything about me,” said Head.
“It’s not if something happens, it’s when,” Attorney Andrew Rossow said.
“The goal of it is to actually reduce or prevent fraud. Does it actually prevent it 100 percent? No,” he continued. “It’s almost impossible or at least very difficult to clone a chip circuit without going into the chip itself and changing some code around.”
But according to the National Retail Federation, there’s one big problem.
“The customers name, their account number, expiration date and all is still is still transmitted,” Craig Shearman, Vice President of Government Affairs Public Relations for the National Retail Federation, said.
FOX 45’s Elyse Coulter spoke with Shearman via FaceTime.
“There’s no difference in the chances of your data being hacked by using a chip card versus a magnetic strip card,” he said.
He said the banks and credit card companies tout the chip cards and readers as a safer way to do business.
The chips sending an encrypted code.
“That encrypted code only says that the card itself is a legitimate card, not a counterfeit card,” said Shearman.
FOX 45 reached out the American Banking Association who told us they didn’t have anyone to talk about the security of chip cards and readers, but did say that counterfeit credit card fraud is down 58 percent in March of this year compared to last year.
FOX 45’s Coulter tried to verify that number, but couldn’t.
However, the federal trade commission reported from 2015 to 2016 a 27 percent decrease in fraud once the chip cards were used.
“The chip cards are an improvement over what we had in the past, but they don’t go nearly far enough,” Shearman said.
Shearman said America needs to get on board with the rest of the world, using a credit card with a chip and pin not signature.
“Anyone who has ever signed for a credit card transaction knows that any illegible scroll will do,” he said. “If a thief has the card and no pin number, it stops them dead in their tracks.”
Shearman says 99 percent of major retailers will be using chip readers by the end of this year, and 80 percent of smaller retailers will have them as well.
He said there’s been a back log from the credit card companies, who need to inspect them before they can be used.
If you just want to bypass technology all together, there is always another option.
“Pay cash. That’s the easiest thing,” said Attorney Rossow.
The easiest thing to do in a world where hacking and identity theft is becoming the norm.
The use of chip card readers is not a law or regulation by the government.
It’s a contractual agreement between banks credit card companies and retailers.