“Banks have been surprised by the level of fraudulent payments made by criminals using Apple Pay,” reports an article by The Guardian. A term being thrown around is iFraud.
Although Apple Pay™ is the revolutionary payments method aimed at protecting the consumer’s sensitive data while also providing convenience, it isn’t foolproof.
The tokenization and encryption that Apple Pay™ offers hasn’t been broken thus far, but fraudsters are setting up new iPhones with stolen information and adding credit card information onto the phone, enabling Apple Pay™ to purchase items illegally.
This ongoing fraud is contributing to the high number of identity theft, and rather than card skimming or stolen plastic cards, these crooks are defrauding the system via customer account takeover.
The problem, some experts think, is that banks don’t have a secure enough authentication system to prove the customer’s identity before adding credit and debit cards to iPhones for Apple Pay™ usage.
Asking for the last four digits of the customer’s social security number, or any other basic question regarding the personal information of the customer isn’t enough to get past fraudsters, who usually have that information to provide.
Moral of this story? Nothing is foolproof.
What’s important to do is ensure your personal data stays personal. Whether you use Apple Pay™ or another NFC capable payment method, Google Wallet, traditional credit and debit cards, PayPal, or even cash, fraud is always possible.
What is also important is not to let fear of fraud prevent you from advancing with today’s technology. Crooks existed before credit cards, and they’ll exist long after we’ve developed past credit cards. Check your bank accounts often, don’t share your personal information, and make sure nobody is standing behind you at the gas pump or ATM nosing around in your banking business.
Cover your assets!