BBB warns consumers about chip credit cards’ vulnerability

Connecticut Better Business Bureau urges consumers to watch for wear and tear damage to CHIP-enabled credit cards.

Over time the CHIP can come loose and fall off, and experts warn consumers that a lost CHIP can easily be used for fraudulent transactions.

"Unfortunately, if somebody finds a card's CHIP, all they have to do is glue it onto another card and they can go on a shopping spree at your expense," said Connecticut Better Business Bureau spokesman Howard Schwartz.

"This is not something that is widely known, and as we approach the holiday retail season, credit cards can take a beating.  Unless you check the credit card CHIP's integrity, it may fail while when you get to the checkout counter."

Another vulnerability common to all credit cards is using them to make online purchases, or to buy over the telephone. Those are referred to as Card Not Present (CNP) transactions. In those cases, consumers are obliged to divulge a credit card's number, expiration date and three-digit security code.

In the event of fraud, cardholders have zero liability, however, it is best to inform the card issuer as soon as possible in the event of a CHIP failure or loss.

BBB has a checklist to avoid CHIP card damage:

  • Don't wait for the CHIP to fail — If a chip begins to peel or come loose, contact your card issuer immediately.  They will send you a replacement card and a new account number.

  • Inspect your CHIP cards — Check your cards from time to time.  It can prevent the inconvenience of having a credit transaction being rejected, and more importantly, prevent fraud.

  • Limit excessive wear and tear — Credit cards have a limited lifespan and they won't last as long if they are jammed into point of sale card readers, scraped or carried in a pocket or purse with keys or anything else that may scratch them.

  • Ask for protective sleeve — Many cards come with them, but if you don't have a protective envelope or sleeve, contact your card issuer. 

This new generation of credit cards is less vulnerable to fraud than earlier card technology, and proactive consumers can prevent their cards from failing or falling into the wrong hands.