Scammers discovering ways to combat credit card chip technology

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Last week’s data breach involving Zippy’s restaurants highlights the risks of using your credit card, despite all the security improvements made to help protect you from fraud.

The Hawaii Better Business Bureau says scammers have discovered ways of combating credit card chip technology.

In at least one case, the cards are being intercepted in the mail. That’s when the chips are pulled off and replaced with fake ones. Then the card is sent on its way to the cardholder.

“It’s as if they copied the information of your credit card, like the credit card number, expiration date, and security number, all those things that you protect from scammers,” said Hawaii Better Business Bureau marketplace manager Jason Kama.

When the cardholder activates the card a day or two later, that opens the door for the scammer to go on a shopping spree. It’s not until the cardholder tries to use the card with the fake chip on it that he or she finds out it doesn’t work.

By then, it’s too late.

In Arizona, scammers managed to insert a small device, similar to a USB, inside a chip reader located inside a store.

“In this case, they’re inserting something that leaves behind something that reads the chip card information and then later they’ll come back and insert that card again to download that information off of that item that they inserted,” said Kama.

It’s not clear how they’re able to use the information since the data is different for every transaction and can’t be duplicated.

So far, there have been no reports of either scam happening in Hawaii.

That’s why paying close attention to your credit card statement is so important.

If you have a concern or are interested in becoming an Action Line volunteer for just a few hours a week, give us a call at 591-0222 weekdays between 11 a.m. and 1 p.m. or send an email to actionline@khon2.com.

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