Re: Another Money Alert
Ok I just read through the MoneySavingExpert website where the article was published and I am correct.
It's a poor article. The issue is NOT about contactless cards per say. It is about "Offline Transactions" concerning cancelled cards which the BANKS are allowing to go through.
In layman's terms, some shops don't use online hookup to the bank systems. They take transactions throughout the day, store them up and then process them all, typically the next day, i.e. they go online at that point and post all the transactions.
There are clearly risks already associated with this practice. Imagine if you had already exceeded your overdraft limit, walked into such a store, and bought something, using conventional chip and PIN. The retailer would have no clue at that point. Only when they came to process the transactions the next day, would the computer system (hopefully !) beep and say, this transaction is not authorised as account has been suspended due to overdraft etc.
In the cases specific to this article, it is the bank cards themselves that have been cancelled against the account. Thus when the retailer goes online to process the day's transactions the bank system SHOULD clearly at that point REJECT the transaction because it was made using a cancelled card.
Very clearly that is not happening and the banks ARE allowing offline transactions to go through for cards that have been cancelled.
THAT, is where the problem is.
The contactless card element is a red herring.
This is negligence by the banks to either :
a) cancel the card in the first place or
b) allow transactions to be processed to your bank account from cards that have been cancelled.
The article is trying to sensationalise the contactless card system when in truth the issue concerns offline transactions which the banks are not dealing with properly.
On the MoneySavingExpert Forum where members have highlighted the dubious article the MSE admin have admitted:
"we know (and the article states) that offline payment isn't exclusive to contactless cards."
and
"We agree it's shocking that many banks and providers debit payments made on cancelled cards without checking, and our hope is that highlighting the issue will lead to improved policies from banks."