06 Apr

EMV and You: What You Need to Know

What does EMV stand for?

The acronym stands for Europay, Mastercard and Visa, the three organizations that developed the initial specifications. EMV was set up to be a widely implemented system for smart card payments. The EMV specifications were developed to make sure chip-based payment cards and terminals could interact.

Why was EMV technology developed?

Unlike a magnetic stripe card, it is virtually impossible to create a counterfeit EMV card that can be used to conduct a successful EMV payment transaction.

How does EMV address fraud?

The EMV chip card includes a secure microprocessor chip that can store information and perform hidden processing during a transaction. Chip cards carry security credentials that are encoded by the issuer (VISA, Mastercard, etc). These credentials, or keys, are stored securely in the EMV card’s chip and cannot be accessed by unauthorized parties. The card’s encryption generates unique dynamic data that changes for every transaction, and that the bank verifies every time the card is used.

This deters card skimming/card cloning that can only be done when cards have a magnetic stripe. Card skimmers and cloners replace a card reader like an ATM with a camouflaged counterfeit card reader. The counterfeit reader records all of the data on a credit, debit or ATM card as it passes through the skimmer.

A recent article from Bankrate showed that from Jan. 1 to April 9, 2015, skimming at bank-owned ATMs increased 173.53% year over year, while growth at non-bank ATMs topped 316%, according to the 2015 FICO Card Alert Service.

Does EMV technology really help cut down on fraud?

Yes, when it comes to skimming, card cloning and counterfeit cards.

It is helpful to look to Canada who implemented EMV technology nine years ago. Since then, debit card fraud losses from skimming are at their lowest level since 2003. The losses have fallen to $38.5 million in 2012 from a high of $142 million in 2009.

The main advantage to EMV cards is that they will cut down on counterfeiting, which accounts for 37 percent of all U.S. credit card fraud.

What about online transactions, purchases where my physical card is not needed?

Thieves like to switch things up when one method to steal becomes harder. Like anyone, they’re trying to work smarter and not harder. One way they will do this is to buy credit card numbers and purchase high value items online like electronics and jewelry. The ONLY way to thwart this is to closely monitor your statements.

If you have reason to believe your information has been compromised, contact the credit bureaus to place a fraud alert on your credit report. Doing so notifies lenders and creditors who pull your report to take additional steps to verify your identification before they extend a credit line or loan in your name. This can help prevent a thief from opening any new accounts in your name and reduce your chances of becoming a victim of identity theft.

Under the Fair Credit Reporting Act (FCRA), consumers may place fraud alerts on their credit reports with the three major credit bureaus, free of charge.

  • Equifax: Online or by calling 1-888-766-0008
  • Experian: Online or by calling 1-888-397-3742
  • TransUnion: Online or by calling 1-800-680-7289

RMLEFCU is currently transitioning to EMV chip technology and we will be keeping you in the loop throughout this process.

 

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