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MVM
join:2005-09-26
Cape Coral, FL

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MVM

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Re: Why Card Fraud Grows

said by Snowy:

"Issuers vs Users Whose Dime Is It?"

There's another player in this and that is the merchant.

There are two primary use cases with respect to the fraud and the user today.
1) The user detects the fraudulent transaction. The user calls the issuing bank and disputes the transaction. Issuing bank posts a chargeback to the merchant. Merchant is now out the $$$ unless they can prove the transaction was legitimate. Issuers are not out $$$, although there is a finite cost of processing the chargeback.

2) The user does not detect the fraud. User is out the $$$.

In order to speed the adoption chip cards, both Visa and MC are going to shift the liability for fraudulent mag stripe transactions from the user to the merchant. This result is no different than use case #1 today.

However, what Visa and MC are really saying to the merchant is "You will no longer be subject to chargebacks for transactions done with chip cards". i.e. the onus will now be on the user to prove the transaction was fraudulent rather than on the merchant to prove it was legitimate.
Mele20
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join:2001-06-05
Hilo, HI

Mele20

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said by More Fiber:

In order to speed the adoption chip cards, both Visa and MC are going to shift the liability for fraudulent mag stripe transactions from the user to the merchant. This result is no different than use case #1 today.

However, what Visa and MC are really saying to the merchant is "You will no longer be subject to chargebacks for transactions done with chip cards". i.e. the onus will now be on the user to prove the transaction was fraudulent rather than on the merchant to prove it was legitimate.

How does making mag strip cards more attractive to the user than chip cards get chip cards adopted faster? What you said doesn't make sense. Are you referring to the banks getting faster acceptance of chip cards by merchants? If so, they still have to get consumers to suddenly accept all liability. How is that going to happen? Even with inattention of Americans to most things these days, this will cause a huge outcry and if the banks won't issue a mag strip card to customers who demand that and tear up the chip card that was sent unasked for...well, how are the banks going to get this switch over accepted quickly? It probably will all depend on whether or not the Democrats can keep the White House as the Republicans are drooling at the notion of being able to royally shaft average Americans on this and on everything.

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MVM
join:2005-09-26
Cape Coral, FL

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MVM

said by Mele20:

How does making mag strip cards more attractive to the user than chip cards get chip cards adopted faster?

Users will be persuaded with massive advertising campaigns by MC and Visa that chip cards are more secure. Before that can happen, merchants will have to have readers that accept the cards.

Convincing merchants they will no longer be subject to chargebacks is about persuading the merchants to invest millions in new readers that can accept chip cards. Since merchants are eating fraud chargebacks today, investing in chip readers should eliminate those loses.

Legally nothing changes responsibility with chip cards. The user is still only responsible for the first $50 on a fraudulent credit transaction. However, like debit cards today, the user will be responsible if the pin is compromised.

The problem for the user with a fraudulent chip transaction is going to be proving that the cryptographic algorithms on the chip have been compromised.

Snowy
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Kailua, HI

Snowy

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said by More Fiber:

Legally nothing changes responsibility with chip cards.

Yes, Congress determines liabilty/limits.
said by More Fiber:

However, like debit cards today, the user will be responsible if the pin is compromised.

Assuming you're talking about a credit card & not a stored value card, there's no doubt issuers would like to see that codified but has Regulation E been modified to incorporate that change?
Mele20
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Hilo, HI

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said by More Fiber:

Legally nothing changes responsibility with chip cards. The user is still only responsible for the first $50 on a fraudulent credit transaction. However, like debit cards today, the user will be responsible if the pin is compromised.

The problem for the user with a fraudulent chip transaction is going to be proving that the cryptographic algorithms on the chip have been compromised.

What are you talking about? I don't have PINS. I have credit cards. If I need to write a check I will do so....why would I use a debit card when I have a checkbook? Or I would pay with something called CASH. I use credit cards for their safety and their other advantages (like mileage, cash back), and because sometimes I need to carry a balance as I live on a modest income in a very expensive state. For those with tons of money why not just pay in cash? Why hassle with a debit card and hold up the line behind you (not to mention the inherent dangers in debit cards over cash or check or credit card)? Debit card users take a lot more time in a checkout line than do credit card users or even check writers. The rude people are generally those using debit cards.

Why would the customer have to prove that the cryptographic algorithms on the chip have been compromised? If I use my RFID card and wave it at the machine and then someone later charges $500 to my card from Spain why would I need to prove anything? I did not enter a PIN that could be compromised. There is no pin on this card. It is a credit card. If the bank told me I would have to use it like a debit card and enter a PIN that would be insane because one reason to use it is that it is contactless and supposedly faster and safer than a mag stripe credit card. I don't care about the faster as you still have to wait for the receipt which can take a long time, but I get tired of having to swipe a card several times to get it to "take" so waving it over the machine would be an advantage especially when under $50 so no need to sign (but you still need the receipt). I would return any credit card that requires a pin be attached to it and cancel the account.

What I see as the danger is not what you see (which I think you mean debit card only and you are not talking about credit cards). I think the danger in RFID cards is the problems with proper shielding. Who wants to carry a separate billfold for those cards? Men maybe, but women want a selection of nice billfolds to choose from and I have not seen any that have shielding that are attractive and fashionable and the right size for my purses. I'd rather carry a checkbook (builtin to the wallet) than a separate, bulky RFID shield that would be smaller than my wallet and require fumbling in my purse for taking up the time I might have saved by waving the card instead of swiping it.

How would a credit card holder, with RFID chip, who uses the card on a phone transaction, on a corded landline, or online where the 3 digit code on the back of the card is asked for by the website, or where the card holder uses a one time (or short time....Discover's is 6 months and I hope they shorten that) number have to prove later that the algorithims have been compromised if there is a fraudulent charge? The card holder might have to prove they used a corded landline (a good reason for keeping your landline) but other than that I don't see how the card holder would have to prove that the algorithms on the chip have been compromised as that has nothing to do with internet and phone purchases. Banks could require hardware be attached to one's computer/phone so that the card is inserted into the hardware when a purchase is made. American Express did that many years ago and I was a tester for it.

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MVM
join:2005-09-26
Cape Coral, FL

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More Fiber

MVM

We're talking about two different things. RFID and EMV are two different things. EMV cards are commonly know in Europe as chip and PIN cards although not all EMV cards use PINs. EMV cards also known as smart cards and require a contact reader.
said by Mele20:

Why would the customer have to prove that the cryptographic algorithms on the chip have been compromised?

Because EMV will put us back where we were before congress passed the credit card liability law. If your chip and pin card is used at a merchant in Spain, you can dispute that charge and the chargeback will occur, but the merchant will have proof that your PIN was used since his system will show that the cryptogram from the EMV card contained a correctly encrypted PIN. Therefore, you must have entered your PIN at the POS terminal.

Snowy
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Kailua, HI

Snowy

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said by More Fiber:

Because EMV will put us back where we were before congress passed the credit card liability law.

Where are you getting that from?
Mele20
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Huh? Credit cards do NOT require pins. If there EVER is a change in that then a lot of folks, like myself, will instantly stop using credit cards. Since that is an extremely gigantic change for Americans and would prove very painful I can't believe that sort of nonsense would ever go over here. I still believe that you are talking about debit cards. EMV is NOT on table in this country. RFID is.

I do not believe for one minute that Americans would allow this utter nonsense and basically evilness. I can see Americans accepting EMV for debit cards but NEVER for credit cards. Debit cards in this nation do NOT have the protections under federal law that credit cards have. That is why only foolish people get debit cards.
Mele20

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said by Snowy:

Assuming you're talking about a credit card & not a stored value card, there's no doubt issuers would like to see that codified but has Regulation E been modified to incorporate that change?

I can't believe a change as important as this would happen without a lot of debate in this country. If somehow it has happened, and I am unaware of it, then how come I can use my PIN LESS credit cards? And how come the issuing banks have not sent me notices of changes in liability? I actually read those...I may not remember all I read...but I read it when it comes and I would certainly have noticed any massive change like this!

What's a "stored value card"? I've never heard of it.

Snowy
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Snowy

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said by Mele20:

said by Snowy:

Assuming you're talking about a credit card & not a stored value card, there's no doubt issuers would like to see that codified but has Regulation E been modified to incorporate that change?

I can't believe a change as important as this would happen without a lot of debate in this country.

It hasn't happened.
The point is that at some time (certainly not in a an election year) it will be up for debate. Meanwhile it's important to not buy into the belief that's it's already a done deal or inevitable because it's not. That's what the forces who want changes in liability to occur want you to believe.
said by Mele20:

What's a "stored value card"? I've never heard of it.

Any type of prepaid card.

StuartMW
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join:2000-08-06

StuartMW

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said by Snowy:

said by Mele20:

What's a "stored value card"? I've never heard of it.

Any type of prepaid card.

One would've thought that was self-explanatory but apparently not.

Juggernaut
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said by Mele20:

Huh? Credit cards do NOT require pins.

Oh really? Mine does, and many do here in Canada. It's a chip card.

Dustyn
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Ontario, CAN
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said by Juggernaut:

said by Mele20:

Huh? Credit cards do NOT require pins.

Oh really? Mine does, and many do here in Canada. It's a chip card.

Same.
My VISA card REQUIRES a PIN code in order to process a transaction. It has the magnetic strip and the chip.

Juggernaut
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join:2006-09-05
Kelowna, BC

Juggernaut

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Yep, unless the POS reader doesn't have the chip reader, or is not functional yet.
Mele20
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join:2001-06-05
Hilo, HI

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said by StuartMW:

said by Snowy:

said by Mele20:

What's a "stored value card"? I've never heard of it.

Any type of prepaid card.

One would've thought that was self-explanatory but apparently not.

I've never had one so why would I be familiar with that phrase? I don't get the point of those kinds of cards.

Juggernaut
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Kelowna, BC

1 edit

Juggernaut

Premium Member

Think on-line purchases to limit liability amounts, or credit-challenged folks. Or, Pay Pal and the like.

*edited to add.
Mele20
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Hilo, HI

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said by Dustyn:

said by Juggernaut:

said by Mele20:

Huh? Credit cards do NOT require pins.

Oh really? Mine does, and many do here in Canada. It's a chip card.

Same.
My VISA card REQUIRES a PIN code in order to process a transaction. It has the magnetic strip and the chip.

In Canada? I was talking about USA. Sorry if that wasn't clear.

I have an RFID card that also has a magnetic strip. It doesn't have a pin. It is the card of the future in the USA during transition to RFID cards that do not require a pin and that will eventually not have a stripe. There are maybe 25-30 merchants in this area where you can wave it. Everywhere else you need to swipe it but no pin required either way. I haven't used it yet as it was sent when my card expired as a replacement for the Platinum card I had which was nicer looking. It's the ugliest card I have, smaller than standard size, and thinner. It would be easier to lose because of the non standard size and the dreary, dark color.

Dustyn
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Ontario, CAN
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Asus GT-AX11000
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said by Mele20:

In Canada? I was talking about USA. Sorry if that wasn't clear.

That's okay, I was referencing Canada not USA as was Juggernaut See Profile. So there are credit cards that DO require PINS.

Juggernaut
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As has been discussed many times here, RFID cards are very insecure. My CC company sent me a chip card 6 months after sending me their new RFID card.

Snowy
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Kailua, HI

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said by Mele20:

I don't get the point of those kinds of cards.

There are many advantages/disadvantages to using a prepaid card.
The reasons I routinely them are:
1. Online purchases.
I don't use CC's/debit card for online purchases as a mater of security.
2. To disassociate myself from certain purchases either online or bricknmortar.
The only disadvantage is the ~$5 premium to purchase the card,
I'll mitigate that by buying high value cards to reduce the cost as a percentage of the dollar amount.
Mele20
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join:2001-06-05
Hilo, HI

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Yes, I was the person who started the main threads here regarding RFID cards. I started a long thread here several years ago on them and then again when I got mine which was about a year ago. At the beginning of the last thread I started, I was very skeptical of the card and its safety. But that turned out to be because of my ignorance. I was sure I knew about RFID cards and didn't want one. However, technology changes rapidly and I was going on my knowledge from the first thread several years ago.

Luckily, I didn't let the negative comments in the more recent thread (that had nothing to back them up) make me believe these cards were still bad. Instead I researched and read a great deal. I suggest you do the same although I am referring to RFID cards in the USA not in Canada or Europe where the system is DRASTICALLY different and NOT better for USA because of the differences. OLDER RFID cards are insecure and, of course, USA banks would love for you to believe that is still the case because they want liability changed to be borne by the customer. So, if they can convince you that RFID cards TODAY THE VERY LATEST TECHNOLOGY IN THEM are unsafe then they have a sucker who is thrilled to be told that in order to get a "safe" card that the sucker has to accept liability and that is "minor" because, of course, with the vastly "safer" chip card it doesn't matter if liability is shifted to the user. Yeah, and pigs fly. Educate yourself. But then your country has already snookered everyone there as has most of Europe. So, I suppose there is no hope for you. Americans have not yet been snookered and, hopefully, we will not allow that to happen.

It sounds like I am the only one in this thread who actually went and read the link Name Game See Profile gave to that forum discussion. (Snowy See Profile doesn't need to read it but others should). That explains some of why Europe's approach is quite different from USA and why USA does not need to nor should take Europe's approach.

Name Game
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join:2002-07-07
Grand Rapids, MI

Name Game

Premium Member

I am assuming the info there is correct..but you never know in this changing landscape.
Name Game

1 edit

Name Game to Snowy

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to Snowy
said by Snowy:

said by Mele20:

I don't get the point of those kinds of cards.

There are many advantages/disadvantages to using a prepaid card.
The reasons I routinely them are:
1. Online purchases.
I don't use CC's/debit card for online purchases as a mater of security.
2. To disassociate myself from certain purchases either online or bricknmortar.
The only disadvantage is the ~$5 premium to purchase the card,
I'll mitigate that by buying high value cards to reduce the cost as a percentage of the dollar amount.

And being a smart shopper..more mitigation with great deals.
»twitter.com/i/#!/search/ ··· src=hash

Juggernaut
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I'm glad you feel secure in your decision. Personally, I don't feel good about any card that depends on a non-physical interface to use. That's my choice, right? As it is yours.

BTW, thanks for your timely insults regarding my country, and other countries. As usual, you belittle anyone that does not agree with you.

Have a good evening.
Mele20
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join:2001-06-05
Hilo, HI

Mele20

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I'm not sure how you equate my comment about England refusing cataract surgery to the elderly until they often are so lacking in sight that they cannot read, watch TV, and fall frequently because they cannot see, to be an insult. It is a sad fact not an insult.

It is also a fact that Europe does not have card verification set up as we do. In Europe everything is not online probably because of the cost of broadband there. Here all verification is in real time on line. It is a completely different system here and unique to the USA. Because of it we do not need chip and pin cards but no one from Canada or Europe ever mentions this. It was not meant as an insult, but as a fact that should NOT be overlooked when discussing why the USA doesn't have the system Europe has and why our system should not be considered "backward and behind the times" as it is not. It is far more advanced than Europe's partly because we enjoy much cheaper broadband.

Name Game
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said by Juggernaut:

I'm glad you feel secure in your decision. Personally, I don't feel good about any card that depends on a non-physical interface to use. That's my choice, right? As it is yours.

BTW, thanks for your timely insults regarding my country, and other countries. As usual, you belittle anyone that does not agree with you.

Have a good evening.

Feel like you are among the chosen..and a rare privilege..it is a common trick by many debaters as they think it makes their point stronger and factual...just don't fall for de bait.
Unless you like the Game.
Mele20
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join:2001-06-05
Hilo, HI

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said by Name Game:

said by Snowy:

said by Mele20:

I don't get the point of those kinds of cards.

There are many advantages/disadvantages to using a prepaid card.
The reasons I routinely them are:
1. Online purchases.
I don't use CC's/debit card for online purchases as a mater of security.
2. To disassociate myself from certain purchases either online or bricknmortar.
The only disadvantage is the ~$5 premium to purchase the card,
I'll mitigate that by buying high value cards to reduce the cost as a percentage of the dollar amount.

And being a smart shopper..more mitigation with great deals.

Are you agreeing or disagreeing with Snowy See Profile? Are you saying there are "great deals" on prepaid cards? I don't quite get your comment.
Mele20

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So, because I didn't provide the link to prove my comment about many elderly in England being denied cataract surgery until they are almost blind I am a trickster? UGH. I thought if I provided it then we might have a slew of OT comments but I can give it to you by PM if you'd like.

Name Game
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Because it was not for you..nevertheless..has to do with great deals one can find..same product lower prices and a reason to shop online..also since you do prepay them..I think people tend to be more cautious when to use them for a purchase at bricknmortar.
Name Game

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to Mele20
said by Mele20:

So, because I didn't provide the link to prove my comment about many elderly in England being denied cataract surgery until they are almost blind I am a trickster? UGH. I thought if I provided it then we might have a slew of OT comments but I can give it to you by PM if you'd like.

Then why inject it at all I am not interested in it so save your PM's...this thread is about credit card fraud..