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The Resource Center Credit Fraud & Credit Monitoring | post

Are these new RFID credit cards safe?

by Steve Schwartz on

Summer travel season is upon us. Many of you are already starting to pack for this year's big trip, and for more than a few of you the likely destination is Europe. That being the case, this is the perfect time to talk about a subject that is creeping more and more into vacation planning - do I need to take a RFID credit card and how safe are they?

A "radio frequency identification" credit card is one that has a chip embedded in the card. The chip contains and broadcasts much of the same information that a traditional card carries on the magnetic stripe on the back. A great many retail establishments in Europe, especially restaurants, no longer swipe credit cards. Rather they read the chip in the card at table side using a device held one to four inches from the card, and essentially the card never leaves the diner's hands. You can even just hold your wallet up to the scanner. Reports are, in some establishments, no RFID card - you had better be prepared to pay cash.

RFID cards are still not commonly available here. Most of the big card issuers will send you one upon request. Then too, in point of fact, most European establishments will also have a magnetic card reader available to swipe your card should you not have a card with a chip. But as the use of chip embedded cards become the norm abroad, and eventually in this country, the next generation of cards will all likely have them.

Which leads to the obvious question - are they safe?

Since the new technology allows the card to be read while still in the owner's wallet, can identity thieves steal credit information simply by placing an RFID scanner nearby? The answer seems to be a conditional maybe, but a rather extraordinary set of circumstances would have to be present.

Remember we said the card is read by a scanner held one to four inches from the chip. That would mean a bad guy would have to get his scanner within four inches of your card. Some argue this would be possible by a scammer bumping into you in a crowd and running a wand over where your wallet is - pocket or purse.

Some argue that scammers can develop more highly sophisticated scanners that can work at greater distances, but that will take a leap in technology that would be costly, and in the end probably not worth it.

The current generation of RFID cards represents not only an ease of use for both the merchant and the card holder, but also an advance in protective technology. Most RFID card now being issued encrypts the cardholder’s information. So even if the card is read by a remote scanner, to even access personal information, the scammer must also be able to break the card issuer’s encryption code.

Moreover, RFID cards also create a new authentication code for each transaction. Unlike a magnetic stripe card a thief can use over and over until the card is shut down, with a single authentication code it is pretty much a one and done situation for the scammer.

(But if the card contains both a chip and a magnetic stripe, and it physically falls into the hands of a bad guy - you are in the same boat as with any stolen credit card, it can be used until the account is shut down.).

Much of the studies cited as showing the danger of RFID cards are several years old and were based on what can be characterized as first generation cards. Today's cards are much more sophisticated than those issued three and four years ago.

However, as the summer travel season approaches ads are everywhere on the web, and in print publications, saying you "must" purchase a new scanner proof wallet or risk your card being scanned by a thief in a crowd. These scanner proof wallets usually are aluminum-lined lined or you might be warned you must by card sleeves designed to disrupt unwanted radio waves. But if you are worried, you can accomplish the same by simply wrapping your card or cards in aluminum foil, or an empty Altoids mint tin works just fine.

Or, if you are carrying two RFID cards, carry them together. Anyone scanning them will get interwoven information from both that will be impossible to separate and decipher.

There is no doubt that RFID chips and the wave of the future. By 2017 all U.S. passports will contain chips. There is a new method of embedding radio frequency identification chips in paper allowing for "smart" paper to be used in banknotes, legal documents, and tickets. Already the European Central Bank, the Bank of Japan and the Saudi Arabian treasury are studying chip embed currency.

So, as the say - what's in your wallet?" If it's an RFID credit card, you probably don't have to worry, and if your travel is to many places in Europe, you'll be ready to handle any transaction.