Published on: 7 Aug 2018
Buying goods and services online is making our lives easier, especially those deployed or living in an isolated area.
However, there are many risks associated with online fraud when spending money on the internet and many people have lost money to scammers.
To help prevent fraud, banks will introduce a new safety feature next year for customers paying online using a credit or debit card. Under the new rules, when you are about to complete your purchase, you will need to provide a special code together with your card details and the last three digits of the CVV number on the back of your card. This adds a secondary layer of security and reduces the chances of falling victim to online fraud.
The bank can send the code in a text message or, if you are using a banking app, the code can be generated there. Alternatively, you can obtain the code on a handheld device provided by the bank, similar to the one you use to access your bank account online.
The new rule doesn’t apply to purchases under 30 euros (around £27). You will be able to spend up to £89 or make five purchases under £27 before having to go through the verification process.
Regular payments such as membership fees and direct debits will not require a verification code. The same applies to shops and payees that you trust that you choose to ‘white list’.
Fraud is big business
In 2018, fraudsters stole more than £310 million from victims by getting hold of their card details and making purchases online. Just 2 per cent of online purchases currently use a secondary layer of security. This makes the fraudsters’ work easier, as it means that most people do not take enough precautions when shopping online.
According to This Is Money, the full financial details of a British person, including account number, sort code, and card information can be purchased for just £27 online.
But under this new scheme, one in four transactions will require extra verification, significantly reducing the risk of fraud.
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