Over the last several years, retailers have been attacked by an unprecedented string of hackers who have stolen the data of credit card users throughout the United States. In 2015, American retailers and credit card issuers finally began the process of migrating from the old magnetic stripe standard to cards with a sophisticated microchip technology, often called EMV smart chips. EMV stands for Europay, MasterCard, and Visa, the companies that were originally behind the creation of the smart chip standard for credit cards.

How the migration is working

Even though the EMV smart chips have been around for decades, the credit card industry in the United States made the choice not to utilize it until recently. The belief was that fraud could be countered in other, less expensive ways. And while this might have been true at some point, the cost and scope of criminal hacking attacks has dramatically increased in recent years, while the price of the new microchip technology has fallen.

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On October 1st of 2015, the American credit card industry underwent a liability shift. At that time, credit card issuers that had not given customers a card with an EMV smart chip became liable for fraudulent transactions, although retailers that had not upgraded their systems would be held liable if the card issuer did provide the cardholder with the latest technology. Note that in all cases, Federal law says credit card users are held liable to a maximum of $50 for a fraudulent transactions, yet nearly all credit card issuers waive that requirement by offering a zero liability policy.

The gas station exemption

The one major exception to the October 2015 liability shift has been gas stations. Specifically, the automated payment terminals at the pumps were given two more years, until October of 2017, to become compliant with the new standard. The reason has to do with the cost of replacing these terminals, which are integrated into much more expensive pumps. In addition, gasoline pumps are subject to state inspection laws, and the entire pump must be re-certified when it is changed. Finally, gasoline is one of the most price sensitive commodities, and drivers will go out of their way to save just a few cents per gallon.

Delaying the implementation of EMV smart chip readers at automated gas pumps was a compromise that was necessary for gasoline retailers to support the industry’s implementation plans. Nevertheless, it is unlikely that all gas stations will wait until October of 2017 to begin deploying EMV compatible credit card readers. As new gas stations are built and old gas stations are renovated and upgraded, drivers can expect to see more pumps equipped with EMV card readers. Furthermore, smart gas station managers will likely try to avoid the rush to become compliant at the last minute.

Why this can be a problem

The way that EMV chips enable credit cards and terminals fight fraud is by making it much harder for criminals to use stolen credit card data to clone a card. The old magnetic stripe technology dates back to the 1960s and can easily be replicated with minimal technological skill. In addition, it isn’t very hard for criminals to purchase the components of a magnetic stripe reader in order to fraudulently obtain your credit card information. Such devices are called skimmers and they can be used by a waiter who takes your card.

Skimmers can also be affixed to automated credit card readers such as those at gas stations. The idea is that a criminal can put a skimmer on a gas pump, and retrieve it at a later time. Until gas pumps are retrofitted to use EMV smart chips, they will be much more vulnerable to criminals using skimmers.

Protecting yourself from skimmers and other kinds of credit card fraud

The easiest way to thwart skimmers is to look closely at a gas pump before using it. If the credit card reader looks unusual in any way, you should report it to the management of the gas station or to the police. You can try to touch and even wiggle the credit card reader to see if it looks flimsy or poorly attached. Another giveaway is a piece that looks recently painted or painted a different color than the rest of the pump. Also, if the credit card reader at the pump you are using looks different than those around it, that would also be very suspicious.

Finally, the ultimate way to protect yourself from credit card fraud is to carefully review all of your monthly statements, looking for fraudulent activity. Even when the EMV deployment is complete, there will always be other ways for criminals to perpetrate fraud. And while strong Federal laws have protected credit card users for decades, it has always been up to cardholders to spot bogus charges, report them to their card issuer, and have them removed from their account.