Santander acts on £300 contactless fraud threat – so what’s YOUR bank doing?

Contactless card scams discusses by Which? expert

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Millions love contactless cards because they make spending money at the till quick and easy, but others hate them for exactly the same reason. They worry contactless they make spending on debit and credit cards a bit too easy – especially if their plastic falls into the wrong hands.

When the limit for contactless transactions was lifted to £100 in October, many card users became even more anxious.

Laura Suter, head of personal finance at AJ Bell, said shoppers may have good reason to be concerned. “The £100 limit is a paradise for thieves who can now steal hundreds of pounds from you before you’ve even noticed.”

With contactless cards now issued as standard “many will sleepwalk into a £100 limit without realising it,” she warned.

There is some protection as users must key in their PIN if making multiple transactions, but only after they have racked up a hefty £300 of spending. “If thieves take your purse and wallet containing multiple cards, your total loss could be even higher,” Suter added.

Another fear is that it could lead to a rise in bag snatching and pocket picking, as thieves grab cards to go on a spree.

Some banks have apps that allow users to freeze their cards if lost or stolen, but Suter said this will not protect less digital savvy vulnerable and older people.

The industry argues that contactless fraud is minimal and shoppers are fully protected against any losses, say, if their card has been stolen. 

UK Finance chief executive David Postings said: “Every card also has an in-built security check which means that after a certain amount of contactless transactions, customers will need to enter their PIN to verify they are the genuine cardholder.”

Yet Santander has just announced new security measures to protect its customers, who can now set a lower limit for contactless transactions, ranging from £5 to £95. 

The limit can be increased in £5 increments via its online bank or mobile app, or switched off altogether. Customers can also request a non-contactless card.

Andrew Hagger, banking expert at MoneyComms, said: “This is a step in the right direction and I would like to see every bank offer full flexibility.”

Santander is not alone to act.

Halifax, Lloyds and the Bank of Scotland also allow customers to select their own limit of between £30 and £100, again, with £5 increments on debit cards.

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Barclays, Nationwide, NatWest and TSB allow users to opt out of contactless altogether, either by requesting a new card, or disabling the contactless functionality. However, users cannot select a lower limit.

Some do not offer this flexibility.

Barclaycard, American Express, Capital One and MBNA will not allow a personal limit or let you turn off contactless.

Banks insist everything will be fine, saying contactless fraud cost users less than 2p in every £100 spent last year.

If still worried, check what yours offers.

If you ever suspect your card has been stolen, inform your bank immediately, said Sarah Coles, personal finance analyst at Hargreaves Lansdown. “You are not responsible for any spending from that point. Many banks will also refund money spent before you have a chance to call.”

The other big risk with the £100 limit is that it makes it easier to spend money, Coles said. “This raises the risk that we wave our card at a reader without considering our spending in the same way we would if we were handing over cash.”

If you do not want to go contactless, contact your bank to lower your limit or issue a new card. If it won’t, it may be time to switch bank.

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