Credit & debit card fraud is on the rise in the U. S.

U.S. credit and debit card fraud is on the rise. According to one survey, nearly a third of American consumers have reported credit card fraud in the past five years.

And part of the problem, as Andrea Rock of Consumer Reports tells NPR's Mary Louise Kelly, is that U.S. card issuers rely on security systems that lag behind measures taken in other countries.

"The credit and debit cards that most Americans use are really surprisingly vulnerable to fraud," Rock says. "Because, unlike cards in most of the rest of the world, they rely on outdated technology."

Rock, a senior editor at Consumer Reports, wrote about the technology gap in a recent article for the magazine.

"The account information that's needed to make a transaction on American cards is stored, unencrypted, on a magnetic stripe on the back of each card," she says.

That information is easily copied and reproduced on a bogus card. Rock says that in general, thieves prefer to target debit cards, which allow them to get cash from an ATM, instead of conducting risky transactions in a store.

As U.S. card systems start to catch up with the rest of the world, Rock says there are some steps consumers can take to protect themselves.

First, she says, never enter your PIN number unless you absolutely must.

"It's better to use a credit card rather than a debit in general," Rock says.

That means that if a merchant offers the choice, consumers should choose the "credit card" option when using their debit card in a store.


Link:
http://www.npr.org/2011/06/03/136896517/aging-card-technology-drives-rise-in-credit-fraud