The EMV chip has make credit card fraud harder, but credit card fraudsters are taking an interesting new twist. By intercepting new credit cards in the mail, they are stealing the new chip off the card and replacing it with an old, dead chip, before resealing the envelope and sending it on to the recipient. The new chip is glued on to a fake card. When the recipient activates the new card, the stolen chip is activated, and the theives can go on a spending spree with their fake card.
It would appear that the criminals might have inside help from US Postal Service employees, or other delivery agents. They also appear to be focusing on corporate credit cards at this time, perhaps because they are often mailed in batches, and have infrequent usage patterns.
Detecting this exploit is relatively easy.
- Check the envelope. Look for signs of tampering or resealing.
- Check the chip on the new card. Make sure it is firmly attached, look for tiny pry marks, heat warping, or discoloration around the chip that might indicate the chip was removed and replaced.
- Activate your card at your bank. The bank will check the validity of the chip when activating the card.
- Make a small test purchase. If going to the bank isn’t practical, then take your card to a store and buy a pack of gum or something else small. This has to be a card-present transaction using the chip reader, not the magnetic stripe. If the purchase fails, then your chip may have been swapped. Call your card company to report the problem and cancel the card.