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Cell phones might prevent credit card fraud

Tyler Metzger

By next summer, your cell phone might be able to unlock your car, open your house or even prevent credit card fraud.

Speaking at a conference in Stockholm on June 23, Hakan Djuphammar, an executive for the telecommunications company Ericsson, said in about a year almost every new cell phone will be equipped with near field communication. The technology is a short-range, high-frequency wireless tool that is similar to radio-frequency identification (RFID) or Bluetooth.

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Phones outfitted with the technology will be able to download and store “trusted identities” or “secure elements,” such as pass codes to doors or bank account numbers. The stored elements on the phone can then be used to unlock car or house doors or make purchases with the wave of a phone.

But besides the convenience of not having to hassle with your keys, Djuphammar noted that mobile phones could become instruments of fraud prevention, too.

It would work like this: You make purchases with your credit card. You also make calls with your mobile phone, which is linked to your card using near field communication technology. The calls and purchases are monitored using mobile user location data and Internet Protocol (IP) mapping. And since you purchase items and make calls within the same vicinity, the card issuer and phone provider see no threat of fraud.

However, if purchases and phone calls begin showing up at separate places around town, a red flag could be raised and a fraud investigation starts.

“In some countries there’s a lot of fraud with credit cards, so therefore it’s in the interest of the credit card issuer to be able to match the position of the phone that belongs to the person who has a credit card,” Djuphammar said.

See related: Study: Credit card fraud Americans’ biggest fear, 4 steps to take after ID theft

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  • It is exciting to hear about the incorporation of NFC technology into cell phones. I look forward to the day when I can make purchases with my cell phone and leave my wallet at home. As excited as I am about this new technology, I feel it is of utmost importance to keep it safe and secure. As the President of a new technology company focusing on securing NFC transactions, I feel it is paramount to protect these consumers from fraud.
    By going to great lengths to secure information, we are creating a safe environment where people will be able to complete transactions on their cell phones with peace of mind. The worst thing that could happen with this promising new technology would be to have it inherit all of the vulnerabilities from contactless systems of the past.

  • Anonymous

    So what happens if the phone is off? or if the phone does not have any reception etc? Will this system still work?
    It might be easier just to lock and unlock your card when you travel.