Unfortunately, it is likely impossible to eradicate card cloning fraud. Even now, criminals are finding ways to breach the most current card security standards. So the best approach when it comes to preventing card cloning is a comprehensive risk management strategy.
1. Use and invest in new card security technologies
New security standards like EMV chips and RFID technology make it harder for criminals to clone cards. The implementation of Europay, Mastercard, and Visa (EVM) chips has been one of the biggest advancements in the fight against card cloning since they are safer alternatives to magnetic stripes. They use payment information that is encrypted to make it exceptionally difficult for criminals to clone cards, but EVM chips still have their vulnerabilities.
Even if their cards have EVM, people are more likely to use the magnetic stripe at POS terminals due to the familiarity allowing their credit card information to potentially be stolen. Also, a recent study from a security firm stated that cybercriminals have found a method to make purchases with a magnetic stripe card using data that was meant for EVM chips.
This gives insight to the upsetting reality that is: it is almost impossible to get criminals to stop cloning cards because they will always try and find a workaround, so this should be just one part of an effective strategy to combat card cloning.
2. Review transaction infrastructure
Companies, especially financial institutions, should periodically take stock of the points at which they take card transactions, such as ATMs and point-of-sale machines. They should secure these points to make it more difficult to clone cards.
For example, making sure that POS terminals are all EMV compliant as well as helping customers purchase things in a more secure manner are a few ways Merchants can help make it more challenging for criminals to clone cards.
Despite possibly being impossible to end card cloning, the combination of customer profile data, securing physical infrastructure as well as EMV chips can help banks and merchants be more confident that the cards that are being used aren’t cloned cards, but instead, are the actual, legitimate, ones.
3. Educate the public
Consumers should be made aware of how card cloning works, how big of a threat it is, and how they can protect themselves. Offer tips such as:
- Check card readers for bulk or other suspicious traits before inserting your card
- Monitor your financial accounts and set up suspicious activity alerts
- Use ATMs associated with banks whenever possible
- Use EMV chip readers or contactless payment whenever possible
- Contact your bank or card provider immediately if you think your card has been cloned
4. Build customer profiles
Analyzing a customer’s transaction data – now often done through machine learning – can reveal patterns in how they use their card. These include:
- Where they live
- What businesses they frequently visit
- Which transmission method (magstripe, EMV chip, or contactless pay) they typically use
- How often they use their card
- How much they spend, on average, per card use
- What time(s) of day they tend to use their card
These traits can be used as a baseline for what “normal” card use looks like for that customer. So if a transaction (or series of transactions) shows up on their record that doesn’t match these criteria, it can be flagged as suspicious. Then, the customer can be contacted to follow up on whether the activity was legitimate or not.
Quickly Detect and Respond to Card Cloning Fraud with Unit21
Card cloning fraud can’t be stopped by new security technology alone. Preventing it requires a multi-faceted approach that also includes educating consumers, knowing who your clients are, analyzing customer behavior, securing vulnerable contact points, and keeping an eye on financial activity.
Equip your risk and compliance teams with Unit21’s transaction monitoring solution that puts them in control with no-code rule definitions and detection workflows. To see it in action, book a demo with us today.
