Remember the first time you received your new credit or debit card in the mail, and it had that little silver box on the front of it? You’d heard these EMV chip cards would be coming, but you weren’t sure how they worked or why they were so necessary.
As of October 2015, retailers and financial institutions are required to accept these cards; if they don’t, they could be held liable if fraudulent charges are made, or other types of identity theft occur. By now, you’re probably used to inserting your card into the machine (no more swiping) and waiting patiently for the transaction to complete. It took a little while to retrain your brain, but you no longer forget that you can’t swipe your card.
2016 was the first full year that consumers were using chip and PIN cards at brick-and-mortar stores across the country. That tiny integrated chip—which creates a new authentication code for every transaction—was supposed to be the answer to those high-profile breaches at retailers like Target and The Home Depot.
So, are the EMV chip cards working? Or have identity thieves figured out a workaround?
The Verdict on EMV Chip Cards
There’s some good news in a recent report about identity theft from Javelin Strategy & Research: counterfeit fraud is down 52% at EMV-enabled stores. You can expect to see that number improve over time, as gas stations still have a few years before they have to be compliant and not all merchants have made the change-over yet. EMV chip cards were supposed to play a role in eliminating card cloning as one of the types of identity theft—and they’re working.
Don’t cancel your credit monitoring service just yet, though.
Since brick-and-mortar stores threw a wrench in their plans, identity thieves took their efforts online instead. Javelin reports that card-not-present fraud rose 40% in 2016. Additionally, new account fraud grew by 20%, and account takeovers increased by 31%.
Overall, approximately 15.4 million individuals were victims of identity theft in 2016; that’s up from 13.1 million in 2015. Identity thieves aren’t stopping—they’re just finding new ways to steal our information when we throw up roadblocks in their way.
The good news is that the dollar amount of total losses versus the number of victims is dropping. That means, in general, it’s taking people less time to discover identity theft and get it resolved. People are checking their accounts more frequently, and using identity theft and credit monitoring services to stay on top of any sketchy charges or changes in credit scores.
Identity thieves are never going to give up, but we don’t have to make it easy for them. With new security measures in place, like EMV chip cards, and identity theft protection services watching accounts 24/7, these criminals can run—but they can’t hide.