NEW YORK (MainStreet) — More than 11 million Americans were victims of credit card fraud last year, making it the number one form of identity theft. But now, one company has come up with an innovative way to deal with the problem.
Visa Europe, an affiliate of Visa credit cards, announced this month that it will soon begin to use the location data from the GPS system that is built into most smartphones to determine if a particular credit card transaction is fraudulent or not.
Under this new plan, customers could give their cell phone information to Visa Europe, which would then be able to compare a person’s location at any given moment to the location of charges on his or her credit card. So, for example, if Visa Europe noticed a substantial charge at a car dealer in one city while your smartphone’s GPS indicated that you were actually in a different city at the time, the company would have reason to assume that someone other than you had made the charge.
The perks of such a system are obvious: The credit company would be able to detect fraudulent charges more quickly, resulting in lower costs for the consumers and card issuers involved and a faster turnaround for canceling the card and getting a new one. As Visa Europe notes in a press release, this system would also allow the company to approve legitimate charges more quickly as well.
Of course, this system does raise some questions.
First and foremost, what happens if someone steals your credit card and your cell phone? Such a purse-snatching would suggest that you had been mugged, and you would probably already be on the phone with your bank to report the credit card as stolen. Indeed, it seems that the main use of the system would be to notify people who are simply not aware that their credit card information has been stolen.