4 ms·

> The kind of fraud prevented by a PIN enabled chip card is supposedly pretty rare. Are lost and stolen cards not a common problem? I suppose if the card hold

by u801e 9y ago

> The kind of fraud prevented by a PIN enabled chip card is supposedly pretty rare. Are lost and stolen cards not a common problem? I suppose if the card holder reports it to the credit card company fast enough, it would prevent fraudulent charges from going through, but it would be nice if the person who found/stole the card(s) wasn't able to just use it without having to enter a PIN to do so.

tialaramex 9y ago
Both the card and the terminal are able to make a decision about whether this transaction must be "online", a live session. If either insists on being "online" and that's not possible the transaction fails. If the card is reported stolen, all such online transactions are (should be) blocked, and the risk is up to both the issuer (you could ship cards that insist on all transactions needing to be online, and some cards intended for people who struggle to manage their money do that) and the merchant (you can insist on going online for every transaction). However, forcing every transaction online is super annoying. Train sat in a tunnel? No card purchased G&T for you until it gets out again. Internet down at the burger shack? No burger until their Internet is back up. Merchants would usually rather risk some fraud for smaller purchases, than lose sales when there's a problem. "Weird money" causes the same issues, it's rare in the US but some places deliberately issue loads of different money that's all theoretically worth the same but you rarely see some types. In England for example a Scottish or Northern Irish bank note, issued with the name of some company you've never heard of, is still "worth" the same as familiar English notes. Except if you live closer to France than Scotland you've probably never seen one before. Maybe it's fake. Should you, as a shopkeeper, risk taking this weird-looking money? Again, risk of fraud versus risk of a lost sale.
pmorici 9y ago
My understanding is that lost and stolen cards are a very small portion of fraud compared to industrial scale skimming, cloning, hacking operations. Lost stolen cards only account for 14% of fraud cases. [0] [0] https://www.nasdaq.com/article/credit-card-fraud-and-id-theft-statistics-cm520388 https://www.nasdaq.com/article/credit-card-fraud-and-id-thef...

by u801e 9y ago

tialaramex 9y ago

Both the card and the terminal are able to make a decision about whether this transaction must be "online", a live session. If either insists on being "online" and that's not possible the transaction fails. If the card is reported stolen, all such online transactions are (should be) blocked, and the risk is up to both the issuer (you could ship cards that insist on all transactions needing to be online, and some cards intended for people who struggle to manage their money do that) and the merchant (you can insist on going online for every transaction). However, forcing every transaction online is super annoying. Train sat in a tunnel? No card purchased G&T for you until it gets out again. Internet down at the burger shack? No burger until their Internet is back up. Merchants would usually rather risk some fraud for smaller purchases, than lose sales when there's a problem. "Weird money" causes the same issues, it's rare in the US but some places deliberately issue loads of different money that's all theoretically worth the same but you rarely see some types. In England for example a Scottish or Northern Irish bank note, issued with the name of some company you've never heard of, is still "worth" the same as familiar English notes. Except if you live closer to France than Scotland you've probably never seen one before. Maybe it's fake. Should you, as a shopkeeper, risk taking this weird-looking money? Again, risk of fraud versus risk of a lost sale.

pmorici 9y ago

My understanding is that lost and stolen cards are a very small portion of fraud compared to industrial scale skimming, cloning, hacking operations. Lost stolen cards only account for 14% of fraud cases. [0] [0] https://www.nasdaq.com/article/credit-card-fraud-and-id-theft-statistics-cm520388 https://www.nasdaq.com/article/credit-card-fraud-and-id-thef...