Contactless Card Fraud

31st Jan 2025

Contactless card payments have become incredibly popular in the UK, surpassing chip and pin payments in usage.  Currently, around 70% of all payments in the UK are made using contactless cards ad this percentage is increasing all the time. Contactless is easy, quick and convenient. However, contactless payments can also be prone to fraud, which can lead to both financial loss, and an ongoing impact on your credit score.

How Do Contactless Cards Work?

Contactless cards have a small chip in them, which allows them to communicate with card readers. When you hold your card near a reader, the device sends out a signal that the card's antenna picks up. The card’s chip contains the account information which is used to process the payment. When contactless was first introduced, payments limits were set at £20, and this was increased to £100 during the pandemic.

There have been claims in the media that fraudsters have attempted to steal information from a contactless card by standing near individuals in public places, like on trains, and reading their cards through clothing. However, there is limited evidence suggesting that this type of fraud is widespread.

Contactless Cards and Your Credit Report

The danger of fraud using your contactless card is that fraudsters can easily use your details without having to stop and put in the PIN until you notice and block the card, or the software prompts them to enter the number. Having someone commit fraud like this on your account might mean that you haven’t enough funds in your account to meet other direct debits, resulting in missed payments for essential bills and an immediate impact on your credit score.

Avoiding and Reporting Contactless Card Fraud

There are several steps you can take to reduce your risk of contactless card fraud, many of which you might be doing already. Always keep your card somewhere safe and out of sight as a deterrent to the casual thief, and if you’re worried about people reading your card information when standing close to you, there are special wallets and cardholders which prevent this happening. Don’t let a shop worker or someone in a restaurant take your card away to process the payment, and don’t give other people your card to pay for something either. Always get a receipt and make sure the amount you have been charged is the amount you expected. If you think there’s a problem, get on the phone to your bank right away.

Credit Score and Fraud

It’s easy to check your credit score online, either using a website or by signing up to one of the many apps you can download to your phone. If you notice fraud quickly and report it, your card should be blocked before any damage can be done. If however, your accounts have gone into the red and you have missed payments, fraud may have an ongoing impact. Contact the credit reference agencies and explain the reasons for the defaults, and work hard to resolve the problems as quickly as possible.