Among its downfalls, 2020 was a fraud-heavy year. However, there is one type of fraud that can be thwarted in 2021: pay-at-the-pump fraud using cloned payment cards, also known as counterfeit fraud. This happens when cybercriminals skim cards and steal payment card data at fuel pumps or buy them from the dark web, print them onto counterfeit payment cards, and use them at older fuel pumps that do not have an EMV® chip or contactless card reader.
And pay-at-the-pump fraud is rampant. Analysis from Mercator Advisory Group and Transaction Network Services shows that fraud losses on automatic fuel dispensers (AFDs) this year is estimated to be $17,315 per site.
This type of fraud is prevalent because most gas stations still use outdated fuel pumps with point of sale (POS) systems that read the magnetic stripe on the back of a card instead of POS systems that use more secure chip and contactless card readers.
It is time for station owners to upgrade their fuel pumps to protect themselves and their customers.
Upgrading these fuel pumps has been a long time coming. Awareness about the intent to shift to chip cards for secure payments started in 2011 and the date for fraud liability to shift from financial institutions to fuel merchants has been pushed back multiple times since then.
Visa is trying to stop fraudsters from taking advantage of consumers and merchants this way, and is encouraging fuel merchants to upgrade to EMV chip card and contactless readers at the pump — the most efficient way to prevent criminals from successfully using counterfeit payment cards — before the liability shift date of April 17, 2021.
“In addition to consumers having an extra layer of protection, these upgrades benefit gas station owners by removing fraud dollars that impact their bottom line,” said Julie Creevy Scharff, vice president of consumer products at Visa. ”Based on Visa data, counterfeit fraud dollars decreased 87 percent among chip-enabled non-fuel merchants in the U.S. in March 2020 compared to September 2015, when the liability shift occurred for that community.”
Visa believes a similar reduction in counterfeit fraud perpetrated at fuel pumps can be experienced by fuel merchants if they embrace chip card and contactless card readers at the pump.
Fortunately, there is still time to upgrade. Merchants should contact their payment or fuel pump provider so consumers can take advantage of a chip card reader with their chip card or use contactless payment when they fuel up.