Cash Offers Security in the Land of the Rising Fraud
Oct 29, 2024
A new type of credit card fraud is on the rise in Japan, with victims finding illegal use continues even after they cancel the card. Part of the problem stems from transactions not being properly verified by card companies.
NHK spoke to several people who have noted fraudulent expenditure on their cards and struggled to prevent further spending. One victim—a Hokkaido resident in her 60s—says the problems began when she fell victim to a phishing scam. She opened an email purporting to be a credit card statement, and when she followed a link and entered her card details to confirm her purchases, her information was stolen and registered on Apple Pay. Upon discovering this, she notified her card company and requested the card be cancelled, but it continued to be used for two months, running up a bill of around $1,700.
NHK says many similar cases have emerged in the course of its investigation, with victims saying ‘they felt uneasy and stressed as they couldn’t stop their cards being charged.’ It is believed this issue is stemming from a lack of verification by the issuing card company on certain charges.
In normal credit card payments, the data is transferred to the card company to confirm its validity, even when payment is made through a smartphone. But some contactless payment methods for small amounts are permitted without immediate contact with the card company. The user is charged later. It is believed that this system was exploited in the reported cases.
Yamamoto Masayuki, a payment system expert consulted by NHK, notes that ‘when a new method of fraud is utilised, it’s difficult [for card companies] to stop the crimes at first’ but eventually upgrades should be made to close loopholes exploited by criminals.
Fortunately, for occasions when security and privacy are paramount—or in places lacking electricity or internet connections—cash offers a completely secure way to make payments, with instant verification of value being exchanged and no transaction data recorded or shared with third parties.