Guest comment: How the financial regulator's tackled contactless card fraud
The Financial Conduct Authority's director of strategy and competition Christopher Woolard (pictured above) gives an update on the regulator's work to protect consumers from contactless card fraud – and what you can do if you think you've been targeted. Views do not necessarily reflect those of MoneySavingExpert.com. For more background on the issue, see our Contactless card security flaw largely fixed, in win for MSE's two-year campaign news story.
It's now nearly two years since our chief executive, Andrew Bailey, wrote for MSE on our work to prevent contactless card fraud. We've been working throughout that time to keep contactless transactions safe, and in the vast majority of cases they are – but it's important that we, and you, stay vigilant.
A huge amount of work goes on – at the Financial Conduct Authority and across the financial services industry – to make sure people can use their cards securely. For the most part that work happens below the radar – it's not news when things are working well. So we wanted to give you an update on what we've been doing to keep it that way.
More and more of us are taking advantage of contactless payment – in 2017, £52.4 billion was spent via contactless cards and devices, and that was more than double the amount in 2016. So it's clear that people do trust their cards, even though that might understandably feel less obviously secure in some ways than the cash transactions that they're used to or grew up with, because you can't see and feel what you're handing over.
Happily, the risk of contactless fraud is currently very low – in 2017, for every £40,000 that was spent via contactless transactions, only £1 was fraudulent. But that doesn't mean we can afford to be complacent, or that there isn't more to do to get that figure down even further.
Card schemes taking action
Last year, we looked carefully at the processes that a number of banks and card issuers have in place to deal with contactless fraud, and set out very clearly what we expect them to deliver. We're confident that they know what's required of them.
A key tactic for tackling this kind of fraud is making sure that transactions are processed immediately, rather than being stored and processed later. It can be cheaper or more convenient for firms to do processing later, but that increases the risk of fraud.
The good news is that, after we engaged with the major card schemes such as Visa and Mastercard, they have made changes so that almost all transactions are now processed 'online'. This means that if you've lost your card or had it stolen and reported it, it is much harder for someone to use it to make contactless payments. As firms have put these changes in place, the proportion of transactions automatically checked online has significantly increased.
There are some exceptions where transactions still aren't processed online. This is where the slight delay of having the payment checked online might interfere with the customer experience – for example, it could mean significant delays or queues for people paying for a train or bus journey with a contactless card. But these exceptions are few and we expect the number of online transaction processes to continue to rise – and to continue to cut the potential for fraud.
If you're a victim, you're entitled to money back
It's also worth remembering that while there is still the potential for this kind of fraud to affect you, you are protected from loss – if you are a victim of contactless card fraud, you're entitled to all your money back from your card issuer.
We'll continue to keep a close eye on fraud data to see what impact these changes have made and what more we can do to address fraud, including contactless fraud, so consumers are properly protected. This is an industry where rapid change and innovation is delivering real benefits for consumers, and we want to ensure it can continue to do so.
Finally, if you believe you are a victim of fraud, contact your bank or card issuer immediately, using the telephone number on the back of your card, or on your statement. If a fraudster has used your card, you will be entitled to a full and immediate refund.