Identity theft costs credit card companies hundreds of millions of dollars in losses every year. It all adds up, and it’s starting to get pretty expensive.
But credit card companies are fighting back, investing millions of dollars on technology that could stem the tide.
One kind of technology that’s in development would allow some of the numbers on the card to change with each purchase. Master card has been working on contactless technology that allows consumers to simply pass their cards in front of a reader instead of swiping them.
American express is also working on its own version of contactless technology. The card contains a radio chip that allows your purchase to automatically show up on your account. The way this technology works to stem identity theft is interesting — each transaction generates a unique digital signature that changes for every transaction. Because the technology uses radio waves, the company can instantly verify the digital signature.
Look for contactless card technology to grow fast. Sooner rather than later, you may find it coming to an a-t-m near you. Credit card companies hope that by investing millions of dollars in these kind of technologies, the cost of identity theft — which the credit card companies and their insurers have to pay — will drop.
In the meantime, I’ve got a few tips you might want to follow to protect yourself.
- Only carry credit cards you absolutely need.
Keep the rest locked up at home. There’s no need to have a wallet full of cards with you, all the time. Take only what you need and secure the rest, preferably in a home safe that’s flood and fire-proof.
- Make a copy of everything that’s in your wallet — front and back.
If your wallet does get stolen, you’ll know immediately what is missing, and you’ll have the information you need on hand from the back of the card to call right away to report it stolen.
- Cross shred everything that has identifying information on it before you throw it away.
People still rifle through garbage cans and through dumps looking for people’s personal information on bills, credit card receipts, credit card statements. Make sure they can’t read yours.
Need personal finance advice or real estate advice? Send your questions to Ilyce Glink: www.ThinkGlink.com
Published: May 31, 2005