“Criminals in the US are using the new Apple Pay mobile payment system to buy high-value goods – often from Apple Stores – with stolen identities and credit card details,” Charles Arthur reports for The Guardian.
“Banks have been caught by surprise by the level of fraud, and the Guardian understands that some are scrambling to ensure that better verification and checking systems are put in place to prevent the problem running out of control, with around two million Americans already using the system,” Arthur reports. “The crooks have not broken the secure encryption around Apple Pay’s fingerprint-activated wireless payment mechanism. Instead, they are setting up new iPhones with stolen personal information, and then calling banks to ‘provision’ the victim’s card on the phone to use it to buy goods.”
“Criminals with the stolen IDs are understood to have targeted Apple Stores in particular because they both accept Apple Pay and offer high-value items, which can then be sold on for cash,” Arthur reports. “None of the US banks that offer Apple Pay contacted by the Guardian would discuss levels of fraud. But it is understood that US banks are seeking more robust methods to verify peoples’ identities before adding cards to the service.”
Read more in the full article here.
MacDailyNews Take: This is a failure of both the banks and Apple for not having a stringent enough system in place at launch to thwart the criminals from getting stolen cards registered into Apple Pay. The good news is that this has already and will continue to prompt more security at the outset and, as the initial wave of fraudsters are weeded out, Apple Pay’s extreme security itself will therefore reduce fraud significantly.
Read more via Drop Labs: Rampant: Explaining The Current State Of Apple Pay Fraud