Banks and customers are faced with significant difficulty as a result of payment instrument cloning. Skimming, also known as the cloning of credit and debit cards, is the process of copying the magnetic strip on the back of a credit card using a handheld card reader. Therefore, the magnetic-stripe card technology is defective in that a person with access to the device that stores the information may change the data recorded on the stripe, and a magnetic-stripe credit card can be duplicated (cloned) on a personal computer. The EMV system will be examined to see if it is a magic cure for credit card cloning in particular, or if there are still dangers that must be avoided. It will undoubtedly be crucial to guarantee that both types of credit cards are interoperable and those terminals can take both magnetic stripes and magnetic chips during the transition from the existing credit card system to the bank chip smart card.
Cloning of credit cards
Unquestionably, the EMV system represents a positive development in technology. The cloning of credit cards won’t necessarily go away, though, for a number of reasons as will be demonstrated. First, when some banks or issuers of tripartite credit cards have not put the system in place, problems will still exist. The facts surrounding both the unlawful use of a Clone card and the fraudulent use of the original credit card is a serious matter. After diving into the nature of a credit card relationship, each of these viewpoints will be examined.
Nature of credit cards and legal relationships
The bank often gives the cardholder permission to order products or services from several sources. Once the issuer has followed the cardholder’s instructions and paid the appropriate supplier, the cardholder will be required to reimburse the latter. Therefore, both bipartite and tripartite credit cards are covered under the Act. It would seem that credit cards given to the cardholder at their request would be covered by the Act. Therefore, it is questionable whether the Act would apply to a cloned credit card as the former is not given to the credit cardholder (consumer) on their request and there would not be agreement or understanding between the parties.
Unauthorized use of original credit card
The originally issued credit card may have been used fraudulently if it was used to make purchases online or over the phone, at a supplier’s pay point, at an automated teller machine (ATM) where cash is withdrawn. Typically, it states that up until the issuer is notified, the cardholder is responsible for the risk of unauthorized transactions; after that, the issuer is responsible for any losses. A clone card featuring smart card technology has a holographic background for the photo and signature. Further protection can be the supplier’s request to view the individual’s identity document for comparison. There should be a clear ban on promoting credit cards with pre-approved limits to potential customers, especially if they haven’t applied for one yet.
