New European legislation brings in Strong Customer Authentication (SCA) to limit the amount of contactless payments someone can make, in an effort to reduce instances of fraud.
- Strong Customer Authentication (SCA) came into force on 14 September 2019 to help prevent fraud
- £108m is potentially lost from fraud in the UK, as 1 in 12 (5.4 million*) Brits wouldn’t spot a rogue £20 entry on their main current account
- 50% of people haven’t got their free credit report, an easy way to detect possible fraudulent activity
SCA came into force on 14th September 2019 and means that one in every five contactless card transactions — whether debit or credit — will be blocked, requiring the card owner to enter their PIN.
A contactless payment will also be blocked when the number of payments add up to more than €100 — even if it isn’t your fifth contactless payment in a row.
This is a form of two-factor authentication, a common example of which is the touch ID on your phone when making card payments.
How does it help?
SCA is an effort to help reduce cases of fraud. This is especially important as earlier this year, credit experts TotallyMoney revealed a staggering £108m is potentially lost from fraud in UK as many Brits wouldn’t notice a rogue £20 entry on their bank statement.*
The idea is that even if someone steals your card, it’s still highly unlikely that they’ll know your PIN. By requiring your four-digit number, it in theory limits the amount of purchases a fraudster can make with a stolen card.
What are the exceptions to SCA?
If you make your card payment through Apple or Google Pay, you won’t have to re-enter your PIN for every one-in-five contactless transactions that would ordinarily be blocked, as there is already a high level of security involved in these payment methods. Furthermore, if you use your card to pay for public transport, SCA won’t apply.
It’s now part of UK law, so SCA will remain after the UK’s exit from the European Union on the 31st October 2019.
Alastair Douglas, CEO of credit experts TotallyMoney, comments: “The introduction of Strong Customer Authentication is a welcome sign that more is being done to tackle instances of fraud across the UK.
“We understand all too well how fraud can have a debilitating effect on not just your credit score, but also your wellbeing. Although the new one-in-five policy may cause annoyance, reducing the possibility of fraudulent transactions occurring offers consumers a bit more reassurance.
“The adage “prevention is better than cure” certainly applies here, for even though you can take action to rectify the damage and restore things to how they used to be, doing so is no small task and won’t happen overnight. The best way is to stop it in its tracks.
“Another way to keep an eye out for any fraud is to get your TotallyMoney free credit report. Our customers see any financial activity in their name, as well their balances and any payments they’ve made, making it easy to spot anything that’s not right. That means they can then take the appropriate measures to sort things out — before they become a serious problem.
“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking your free report is the first step towards making sure your score doesn’t suffer at the hands of fraud. With this, customers can easily make sure everything is as it should be — helping them move towards a better financial future.”
TotallyMoney’s five tips for staying ahead of the battle against fraud:
- Use Online Banking – Download your bank’s mobile app, or use online banking, to check your statement every couple of days. You can often even set up alerts to get notified every time a transaction is made.
- Hold on to Receipts – Keep tabs of your contactless card transactions, by keeping the paper receipts until the money is taken out of your account.
- Check your Direct Debits – Be aware of future direct debits and regular payments due before payday, so you know how much ‘spare spending money’ you’ve got available — a good way to avoid hefty overdraft charges, too.
- Review your Statements – Don’t ignore your monthly credit card and bank statements. Check that everything is as you’d expect.
- Check your Free Credit Report – Ensure you recognise everything on your credit report — especially credit searches.
*According to the CMA personal current accounts market study update in July 2014 there are 65 million active personal current accounts in the UK – TotallyMoney research via OnePoll 11-16 April 2019 revealed that 1 in 12 people wouldn’t spot a £20 rogue entry on their bank account – 1 in 12 of 65 million = 5.4 million; assuming 1 person has 1 bank account.