Contactless limit increase: the potential fraud spots to watch

From 15 October 2021, the limit on contactless transactions increased from £45 to £100. The announcement has meant numerous people are worried about fraud, their cards being stolen and the provisions in place to protect them. 

How does contactless fraud work? 

There are two main methods, given this type of fraud requires in-person theft:

• Stealing a card and maxing out the limits;
• Leaving a card out of your sight as a ‘tab’ and additional sums being added to it.

According to the Financial Conduct Authority (FCA), the threshold for having to enter your PIN manually will rise to £300 from £130. So in theory, £299 is the maximum amount a fraudster can spend before needing your pin, assuming you haven’t spent using contactless before the theft already. 

However, the issue here is ‘at what point does stealing a card become worthwhile?’ 

It’s our feeling that £299 is much more of a temptation than £129 to a fraudster. Also, in previous years fraud levels involving ‘shoulder surfing’ – watching someone enter their PIN into a machine then pinching the card – hit extremely high levels. This is still an option to a fraudster once they have your card. It seems likely that the higher ‘risk free’ limit will pose a bigger temptation. 

How big a problem is this? 

According to the latest figures from UK Finance contactless fraud is down 7% in the first half of this year. But given that with the £45 limit, it’s a higher risk, lower value method of fraud (compared to push payment fraud or text message spoofing, for example), we can expect that to change. Also, fraud using contactless payment involves taking the card – something that was rather difficult when we were all in lockdown for a big chunk of the year. 

Why is the limit increasing? 

It’s not gone unnoticed that businesses, banks and other organisations actively want people to go ‘card only’. Economically, it’s more advantageous for businesses. But the rush to a cash free society has come in for a great deal of scrutiny and negative commentary. 

Paying by card can make spending money rather intangible. But at least paying by PIN involves getting a receipt. Paying by contactless doesn’t always even do that – so it’s hard to keep on top of how much you’re spending. This can also lead to more subtle types of fraud, like inflating the bill by ‘accident’ on the merchant terminal. 

Can I get a contactless free card? 

While there’s no legal requirement to offer a non-contactless card, most banks do offer one. The contactless option is the default – but if you call and ask you can usually get a non-contactless card.