How to avoid contactless card fraud

Britons spend billions of pounds each year using contactless bank cards, but with the spending limit about to increase to £100, many users have concerns about their security.

The new limit is ten times more than the initial cap of £10, which was set when contactless payments began in 2007.

The technology allows for payments to be made with a simple tap, without any further checks such as a signature or Pin.

But it also makes it easier for thieves to use the card if it is lost or stolen, especially if a victim has not yet noticed and told their bank.

When does the contactless payment limit increase?

Contactless technology was introduced as a simple way to make quick, small purchases like a sandwich or a round of drinks. However, the initial £10 spending cap has been repeatedly increased since these cards were launched.

The limit was increased to £20 in 2012, to £30 in 2015 and then to £45 in 2020, in response to the Covid-19 pandemic. The next increase will see the spending limit set at £100 and will take effect on October 15 2021. This large spending cap has sparked fears of increased fraud attacks on cardholders.

Reporting contactless fraud

The new limit means British consumers will be among the biggest spenders without having to confirm their identity. Japan’s ¥20,000 limit currently tops the UK’s ceiling by about £30. In America, there is no central limit, but banks can set their own caps.

Critics have wondered who would demand this higher limit, since Pin entry only takes slightly longer. But banks point to the fraud guarantees that are available and the fact that cash, when stolen, is even less secure.

According to the most recent Payment Services Regulations, the rules which govern payment systems in Britain, banks must refund unauthorised payments, unless their customers have broken the rules or been “grossly negligent”.

In other words, as long as you report the loss or theft of your card as soon as you notice it, you should be covered by your bank.

Cards ought to force a Pin check every five transactions or £300, whichever is triggered first, as another security measure.

Avoiding contactless scams

There are ways to protect yourself and avoid having to test your bank’s largesse. Contactless cards contain an antenna to allow the payments system to identify the card and carry out the transaction.

If you are worried about devices reading your card and cloning it, line your wallet or purse with tin foil. This blocks the radio signal needed for the card to communicate. If you are going on holiday or worried about pickpockets try to not carry too many contactless cards at once.