You may have noticed a lag in checking out at the store lately. If you’re paying with a new microchip credit or debit card, the payment process takes about 15 seconds longer. In the age of insta-transactions, this can feel like a lifetime. But it's for a good reason!
That’s because chip cards communicate with the financial institution as the transaction is being processed – which make them more secure. However, not everyone has made the switch to the micro chipped cards yet, and even if you have, some stores and ATMs don’t have the upgraded hardware to take advantage of the encryption they offer.
This means that we are still vulnerable to card fraud and theft. When you use an ATM for example, you could be at risk for theft through a process called ‘skimming’, where your info is stored on a device attached to the machine (by the ne’er-do-wells). Financial data could be compromised online, too, as the new chip cards don't offer additional security when making online purchases.
What does this mean? Even with new chip cards, you have to keep an eye on your accounts for fraudulent activity.
Some people believe that as long as they didn’t actually charge it, they won’t be responsible for the debt. On some level, this makes sense. Why would I be responsible for a purchase I didn’t make? Well as it turns out, that is only partly true.
According to the FTC Consumer website, your responsibility really depends on how quickly you report the incident:
- If you report the loss within two business days after you realize your card is missing, you won't be responsible for more than $50 of unauthorized use.
- If you report the loss within 60 days after your statement is mailed to you, you could lose as much as $500 because of an unauthorized transfer.
- If you don’t report an unauthorized use of your card within 60 days after the card issuer mails your statement to you, you risk unlimited loss; you could lose all the money in that account, the unused portion of your maximum line of credit established for overdrafts, and maybe more.
So it’s not a bad idea to keep an eagle eye on your accounts, and check in frequently to make sure the transactions posted match your activity.
You can also check with your credit union to see what measures they’re taking to protect you from financial theft.
You can find more information about how to protect your information and your accounts in CAP COM's Security Center.