Credit card chips can fall out, posing a security risk

An ABC7 I-Team Investigation

ByJason Knowles and Ann Pistone via WLS logo
Tuesday, August 8, 2017
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The I-Team uncovered a security problem with the chips added to credit and debit cards to keep consumers safer - they can fall out and put you at risk.

CHICAGO (WLS) -- The I-Team uncovered a security problem with the chips added to credit and debit cards to keep consumers safer - they can fall out and put you at risk.

The chips in credit and debit cards protect consumers from hackers, but the same technology could make you a victim of fraud. The chips can physically fall out of the cards and be used by criminals.

Chip transactions take longer, but they make it harder for hackers to steal your account information stored on that plastic.

"It's my security, I value my security," said Oliver Medina, consumer.

But not many people know the chip in your card can fall out.

"We certainly didn't know about it," said Sylvia Corona, consumer.

"That's unbelievable. At the end of the day things are supposed to be more and more secure," said Frank Fortunato, consumer.

"It's concerning, that shouldn't happen," Medina said.

"They are on there pretty good, but a lot of wear and tear can cause issues with the underlying glue," said Shawn Kanady of Trustwave.

I-Team consumer reporter Jason Knowles began looking into the story after the chip on his credit card fell out. He didn't realize it had for days, because he was still allowed to swipe the magnetic strip of his card at many places.

When Knowles contacted Chase, they told him he had to get a new card with a new number because if someone found his chip intact, it could be placed on another card.

"If something like this should happen, the best thing is to call the bank and report it like a lost card," Kanady said. "There's any number of reasons why the glue might become compromised; excessive moisture, heat, manufacturing issues."

Chase spokespeople said that an entire chip falling out of the card is rare, and other times just the top part can come loose, saying, "We strongly suggest replacing the card with a new account and card whenever a chip or metal plate falls out, which doesn't happen a lot, because it's the best way to stop fraud on the account."

"You could probably even glue it on a business card. You just need that chip," said Kanady.

In fact, Kanady told the I-Team he ran tests of his own to prove the hack can happen with any company's card.

"I peeled off the chip of two cards, and swapped them. I took that card to a retailer and ran a transaction. On the receipt you could tell that it didn't match the card I actually used. I suspected that it would work, but seeing is believing," he said.

Tech experts said it is extremely hard to peel the chip off the card without damaging and it takes hours of patience, but it can be done if you're determined.

"And if someone is a professional, they'll figure out a way," said Marquecta Jackson, consumer.

But it's easier for a criminal to use the chip if the adhesive wears off and it falls off naturally.

"Unlike in Europe, where you need a PIN along with the chip, here in the U.S. you don't need that, it's just the chip and they get your card. In your case, if they steal your chip you're not as protected as you think," said John Lee, consumer.

That the chip is supposed to help consumers be more secure and is now a security flaw could be seen as ironic, but experts say the risk is still pretty low.

"The probability of someone bad finding a chip is overall pretty low risk; it is possible though," Kanady said.

The I-Team reached out to the American Bankers Association but they did not respond.

To protect yourself, experts said always keep an eye on your account, set up text alerts and have an everyday action plan for reviewing your card charges. And don't forget to actually look at your chip.

In some cases, your card can still be swiped and used online without the chip, so you might not always know that it's gone.