Contactless Fraud: What You Need to Know

Learn more about the latest method of fraud: Ghost Tapping. Rest easy, we'll tell you all you need to know in order to keep your earnings safe and secure. 

The Newest Scam

'Ghost Tapping' is a new scam that exploits the easy use of tap-to-pay credit cards and mobile wallets. A fraudster will 'tap' or complete a contactless transaction using stolen card information, usually using mobile wallet, skimming technology, or a portable device. This results in unauthorized transactions that victims may not even notice at first because fraudsters will typically keep the purchase amounts low enough to keep from triggering any safety measures. 

How Can It Happen?

There are several ways a fraudster can get your card information, so let's go through the main tactics and break them down.

1. Social engineering — also known as 'Phishing'. Fraudsters may pretend to be someone else; a trusted brand like FedEx, a bank, a tax collector, even state tollway authority, and will either call you or send you an urgent text message or email requesting your information. Under the guise of a missed payment, a traffic violation, or even fraud, they will ask for your card details and 2-factor authentication passcodes. In some cases, the fraudster may already have most of the card information and just need a bit more, such as the three digits on the back of the card.
2. Spoofed websites — Just like the above tactic, fraudsters may pretend to be someone else in order to send you a link to a spoofed site. This link, if clicked, will send you to a site that will appear to be a near perfect clone of the actual site it's pretending to be, but once you put in your card information, the fraudster now has everything they need to spend your cash.
3. Artificial Intelligence — AI is a blossoming new kind of technology that is constantly learning and adapting. AI models like ChatGPT can be useful in some ways but harmful in others. The way AI works is it constantly takes in information and spits it back out. It is designed this way in order to 'remember' past conversations and find any information you need in seconds. But this also means that anything you tell it is now a part of its intelligence. Any sensitive information, like card numbers or bank info, can be spit back out to a fraudster. Sometimes a fraudster may even use AI in order to write convincing phishing texts and emails or even mimic someone else. 
4. Skimming — Some fraudsters will carry a small proximity skimmer using a Near-Field Communication (NFC) reader/writer to read card information from a contactless card or mobile device when it's very close (usually by a few centimeters). They will typically do this in places with a lot of people, such as grocery stores or malls. A merchant may also use this skimming tactic by selling a product without showing the price. For example, a fraudster may pretend to be a door-to-door salesman or a vendor at an event and trick you into buying something by tapping your card to an NFC reader and charge you an obscene amount not anywhere near the value of the product.

DIG DEEPER: How to Spot a Financial Scam

Once a fraudster gets what they need, your credentials are digitally tokenized and put onto a mobile wallet or device that they can use to make small, quick contactless purchases or ATM withdrawals. Contactless transactions usually don't require a PIN and are low-dollar, which makes the process all the easier for the fraudster to avoid detection. 

How to Protect Yourself

To keep you and your money safe from fraud, here are some good tips to follow:

• Avoid using "in wallet" authentication questions that contain sensitive information. If a fraudster gains access to your mobile wallet and they already know your birth date or address, you have given them the key to accessing your funds. In reverse, if they manage to get into your mobile wallet by bypassing weak authentication, they will be able to find that info and use it against you.
  
  
• Pay attention in public spaces. Watch out for anyone trying to bump into you. Be sure to check the price before purchasing anything from a vendor or merchant. Keep an eye on the people around you when making payments.
  
  
• Protect your devices with passwords. This is always a good idea, regardless of whether it's involving your funds or not! Use strong passwords with numbers and special characters, and the longer the password, the harder it is to crack. Using a phrase for your password is usually a great way to remember your password while also keeping it strong.

DIG DEEPER: Protecting Your Account: Essential Security Tips

• Pay close attention to digital wallet transactions. The sooner you spot suspicious transactions, the less damage a fraudster is able to cause. Checking your digital wallet often is a great way to not only keep track of your finances, but also to watch for any purchases you don't recognize.
  
  
• Report anything suspicious. If you suspect someone has stolen your information and is actively making purchases, contact your financial institution immediately. They will be able to shut down your card and take a closer look at your recent transactions. And if you yourself do not authorize a transaction, then your financial institution may even allow you to dispute it. 

DIG DEEPER: 5 Tips for Spotting Fraud In Your Credit

• When in doubt, don't give it out! Don't answer any sensitive questions from sources you don't trust. Pay close attention to phone numbers and websites to be sure they're the real deal and not fraudsters. Safe websites will start with an 'https' and should also have crisp graphics and no misspellings. If you get a call or text from someone claiming to be a government official or financial institution, look up the real number to see if it matches the one you received.
  
  
• Don't click suspicious links. If you do not trust the source sending you the link, do not click it. Even if you don't end up filling out any information on a spoofed website, the website itself could install viruses on your device and acquire your information without your direct input.
  
  
• Set up transaction alerts. With mobile wallet, you are able to set up alerts for transactions. This will help you spot any suspicious transaction instantly and minimize any potential damage a fraudster could cause.
  
  If you have any questions or are ever concerned about your account's safety, don't hesitate to contact your financial institution! They can help set up better authentication, stronger passwords, and much more to make sure your account is protected.