Security Expert: Chip-enabled credit cards don't solve all risks

BOSTON — Credit card companies are still rolling out new technology that is supposed to protect you from fraud, but the new chip-enabled cards can still put your identity at risk.

Many shoppers now have and are able to use their credit and debit cards that have a chip on them, but the transition has not been easy.

Chip-enabled credit and debit cards require a pin or a signature and each transaction gets a unique code that makes it tougher but not impossible for fraudulent purchases.

“Just because the card has a chip in it does not mean that it's not hackable,” said Robert Siciliano, an identity theft expert with Hotspot Shield.

Because not every bank or retailer has converted to chip-cards and readers, the cards still have a magnetic stripe, which he says makes a chip card extremely vulnerable.

“The magnetic stripe is old technology that can easily be replicated.” Siciliano said.

The Massachusetts Attorney General's Office tells us it's received more than 400 reports of credit/debit card breaches as of October this year.

“We thought it was important to protect ourselves and our clients” said Lisa Hills, director of G2O Spa in the Back Bay.

The salon on Newbury Street spent $750 dollars for each of its new chip-card readers this fall and Hills said it has been a learning process for everyone.
           
"It was a bit challenging. Clients didn't know how to use them. We still have to explain a little bit about them. They are not so mainstream" Hills said.

A National Retail Federation survey done this this spring found that 86 percent of responding retailers expected to have the chip-reader system up and running by the end of the year.

Siciliano says until all retailers and banks get on board, your card remains at risk.

“The magnetic stripe still makes a chip card extremely vulnerable. That magnetic stripe will eventually be phased out, but it could be as much as 5 to 10 years” he said.

Until those magnetic strips go away, Siciliano recommends checking your bank statements regularly and signing up to get real time alerts so you know every time a charge is made.

Cox Media Group