Schumer Warns On No-Swipe Credit Cards
Pastor Dale Morgan
Schumer Warns On No-Swipe Credit Cards*
Dec 5th, 2006 7:23 AM
By KAREN MATTHEWS, Associated Press Writer
No-swipe credit cards that use radio waves to relay their data put
consumers at increased risk of identity theft, Sen. Charles Schumer
(news, bio, voting record) said Sunday.
"These cards may be convenient, but they're a double-edged sword," said
Schumer, D-N.Y.
Tens of millions of no-swipe credit cards have been issued in the past
year. When a customer uses the credit card to make a purchase, the card
is processed by a radio frequency identification reader operated by the
retailer.
Schumer said thieves can equip themselves with the radio frequency
readers to steal information from the credit cards, which are being
marketed heavily as time savers.
"All you need to be is within a couple of feet of the customer," Schumer
said. "You may as well put your credit card information on a big sign on
your back."
But JPMorgan Chase & Co., the nation's second-largest financial services
provider and its premier credit card issuer, has maintained the no-swipe
method provides the same level of security as the traditional swiping
method, which involves reading a magnetic strip on the back of the card.
The cards use encrypted data, it said.
"The card and the reader in the terminal are safe and secure, and the
transaction is handled the same way that credit cards are managed
today," Thomas O'Donnell, senior vice president of Chase cards services,
said when the company announced the launch of its blink cards last year.
Schumer, who held a news conference on a busy Manhattan street corner
Sunday amid holiday shoppers, called for regulations to require higher
encryption standards that would make the cards more secure.
In addition, Schumer said contracts for the no-swipe credit cards should
have warning boxes disclosing "the known weaknesses of the technology."
"Holiday shoppers need to be extremely careful with their credit cards,"
he said, "and these companies need to step up their efforts to protect
people from identity theft."
A telephone call to Visa International Inc., the nation's largest credit
card brand, wasn't immediately returned.