Consumer Alerts

    What’s in the Chip?


    October 14, 2015

    Debit and credit cards are getting a new look. A computer chip is being added to both types of cards to make consumers’ information more secure.

    All major credit card providers, including MasterCard, Visa, Discover and American Express, are currently sending Arkansans new cards to replace existing credit cards, and banks are issuing new debit cards.

    Now, instead of swiping the card to complete the transaction, cards equipped with the computer chip will be inserted or “dipped” into a slot and left there until the transaction is completed. The buyer will be prompted to remove the card and to sign for the payment or enter a pin.

    Attorney General Leslie Rutledge issued today’s consumer alert to educate Arkansans about this new credit card and the security benefits of this new technology.

    “Computer hacks and data breaches are becoming more common as criminals target consumers and their credit,” said Attorney General Rutledge. “This new technology protects Arkansans’ personal information much better than the old magnetic strip credit cards. The computer chip creates a unique transaction code that cannot be used again; therefore, any stolen transaction numbers would be void and criminals would be denied if they attempted forge an Arkansan’s credit card.”

    Attorney General Rutledge released the following tips for Arkansans to use during the transition to these new cards:

    • When new credit or debit cards with the computer chip have been received, shred or destroy the old cards.
    • Research the new cards and become familiar with the new transaction processing, which involves a new way to use your credit card at checkout. Financial institutions should have information on the technology on their websites.
    • Continue to review your financial statements. This new technology creates a barrier for thieves, but no safeguard is perfect. The moment an error or unauthorized charge appears on a bank statement, the institution should be notified. Chip cards provide the same consumer protections offered by current cards, and the consumer will continue to have zero liability for fraudulent transactions.

    Major credit card issuers created an Oct. 1 deadline for merchants to have the new card readers in working order, or be held liable for any fraudulent transactions occurring at their establishment. Automated fuel dispensers will have until 2017 to comply with these updates.

    Electronic Transactions Association reports that an estimated 90 percent of counterfeit card fraud could be eliminated with chip card deployment in the United States. Meanwhile, the Arkansas Attorney General’s Office continues to investigate past data breaches related to payment processing systems and stands ready to protect Arkansans in any future cases.

    For more information about credit cards or other consumer-related issues, call the Arkansas Attorney General’s Office at (800) 482-8982 or visit ArkansasAG.gov or facebook.com/AGLeslieRutledge.

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