Contactless debit and credit cards are fast becoming the default payment method for purchases under £30 across the UK, with spending on them having tripled to £25bn last year. But are you happy using them?
Fears about fraudsters using mobile card readers to ‘lift’ sensitive financial details from our wallets have been lurking ever since contactless cards were introduced.
It’s even led to some people buying specially designed protective wallets, or stuffing their existing wallets with foil, to protect themselves.
We don’t think these steps are essential, but there are certainly a number of flaws with contactless cards that appear to put users at greater risk of fraud.
For starters, in an investigation we carried out late last year, our researchers managed to spend over £200 on contactless cards without ever being asked for a Pin.
It’s also emerged that contactless cards can often be used months after they’ve been reported lost or stolen. And most banks often don’t tell customers when their cancelled card is used, relying on them to identify fraudulent payments themselves.
As Michael says:
‘We’re now told that contactless cards can be used for up to three months after cancellation. Banks must have known that, but didn’t let on, and should be liable for all transactions after a card is cancelled.’
No choice
In spite of these flaws, some banks appear to be forcing contactless cards on their customers.
Of the 16 credit and debit card providers, we investigated last year, all of them sent contactless cards to new customers by default.
Five of them wouldn’t allow customers, like Jane, to opt out of receiving them.
‘On my previous renewal I got a regular card and credit card after complaining that I did not want contactless cards. However, on 30 January, my MasterCard was due for renewal and came contactless. My bank apologised but said there was nothing they could do… I feel I’m being forced to find another provider, despite being a customer for many, many years.’
Unacceptable situation?
Now, a group of MPs has told banks that customers should always be given the option to say no to contactless cards if they wish.
The Commons Treasury select committee also accused banks of putting customers in an ‘unacceptable situation’ of being vulnerable to security flaws when using contactless cards, and called for the Financial Conduct Authority (FCA) to help enforce stricter security to prevent fraud.
For its part, the FCA claims to be working on reducing the likelihood of ‘post-cancellation fraud’, but does this go far enough?
Would you opt out of using contactless cards, if given the chance? If so, what would it take for you to embrace this new technology? Or are you happy with your contactless cards?
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