COMMENTARY

Is UK contactless card fraud overblown?

June 1, 2017

iStock illustration

By Andy Ramsden, product marketing director, Trustonic

So, contactless card fraud hit £7 million (US$9 million or 8 million euros) in the U.K. in 2016, up from £153k in 2014. Cue click-bait headlines about fraud soaring by almost 4,500 percent. When you dig a bit deeper, this is both mischievous scaremongering and quite misleading.

Salacious spending spree

Firstly, the article explains how contactless card theft allows criminals to "go on a spending spree without knowing a PIN or any other card details." In reality, any spending spree is limited to between one and three contactless transactions, under £30 (in the U.K.). After which the thief will be challenged to enter the card PIN, keeping contactless 'spending sprees' to a maximum of £90. Also, assuming you report the theft in a timely manner, your issuing bank will carry full liability for these fraudulent transactions and your money returned to you.

Data discrimination

On face value, a 4,500 percent increase in fraud sounds serious, however, without considering the rate of growth of contactless cards over the same period, the statistic is pretty meaningless. Google to the rescue…

According to the UK Cards Association, there were 43.3 million contactless cards in circulation in March 2014 compared to 107.4 million in March 2017. That's a 148 percent increase. Admittedly this stat is not going to grab as many headlines, but it goes some way to explain the increase in fraud.

It doesn't of course explain away a 4,500-percent increase, but when you consider this started from a very low base, the rate of growth is less important than the absolute number. So, using the UK Cards Association data again, in 2016 £21.8 billion was spent on contactless cards. This means that £7 million in fraud amounts to just 0.03 percent of the whole, all of which is effectively underwritten by the issuing banks once card loss is reported.

Make the move to mobile contactless

And if that still makes you nervous, you could always pay using your mobile. The best mobile payment solutions use Trusted Execution Environment (TEE) technology to enable fingerprint authentication and secure smartphone screens. This means criminals can’'t even make a single contactless transaction from my digital wallet if they acquire my device. This layered security makes all digital payments very secure indeed.

I'm not quite sure if the headlines stem from a lack of knowledge or hidden agendas, but a bit of rummaging into the data makes most scandalized headlines about contactless card fraud pretty much meaningless. Education on what to do if you lose your card or spot a fraudulent transaction would serve the public better than jumping on a stat to generate clicks.


Topics: Contactless / NFC, Security, Trends / Statistics


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