A recent discovery of fraud perpetrated through the Apple Pay system has been causing the tech company trouble. The payment system has been hit with a wave of fraudulent transactions, mostly through Apple’s stores themselves, using credit card information stolen from recent data breaches.
According to The Wall Street Journal, approximately 80% of these unauthorized purchases were big-ticket items, like iPhones and iPads, which have high resale value for thieves. It is important for consumers to know that the Apple Pay system itself has not been hacked. Instead, fraudsters are merely using it as a platform to conduct criminal activity with stolen cards. This isn’t high-tech fraud by any means, but it sure is annoying for Apple and banks to deal with. Furthermore, it illustrates the point that Apple Pay and other mobile payment services have a lot of kinks to work out before they can be viewed as secure methods of payment.
How is the Apple Pay fraud being addressed?
This has been a bit of a setback for Apple, who has touted its mobile payment system as completely safe from the beginning. However, the issue here is less with Apple and more with banks that decided to partner with Apple Pay before properly addressing necessary changes in their own security measures. Many banks have jumped at the opportunity to partner with Apple Pay, and the list of banks and credit cards that work with the payment system is growing. To combat these fraudulent purchases, banks are now starting to make customers jump through more hoops in order to set up debit or credit cards on Apple Pay.
These added security requirements can include sending a one-time authorization code to a person’s mobile phone or email, asking customers to log into their online bank account for verification and even requiring customers call a toll-free phone number to speak with a representative who will try to confirm their identity based on questions about past purchases or personal information, such as their home address. As mobile payments become more and more prevalent, it will be up to banks as well as the companies implementing the payment systems to beef up — or entirely revise — security to keep up.
Stolen data from security breaches has a long shelf life
Another thing consumers can learn from these recent fraudulent purchases made with stolen credit cards on Apple Pay is just how long card data stolen in cyber heists remains valuable. Because most banks don’t issue replacement cards in the event of a data breach, many people whose information was stolen in breaches like those seen at Target, Home Depot and other retailers over the past couple of years may still be at risk. This is why it is important to always check your card statements thoroughly, so you can catch any fraudulent charges as soon as possible. It is also a good idea to consider signing up for identity theft protection service — this type of service can help monitor the Internet black market to ensure your personal information is not being used illegally, traded or sold, and many also provide credit monitoring to help you keep an eye on what’s happening with your credit reports. You can learn more about these services by reading our identity theft protection reviews.
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