Card networks have not always fully protected cardholders in these transactions because they require the use of a PIN that only the customer should know. So if a criminal steals someone’s card, that thief shouldn’t be able to use it to use it to withdraw money or make purchases where a PIN is required.
But in addition to the growing number of hacks on retailers and e-commerce sites that have put consumers on edge about potential ID theft, many new card-skimmers — illegal devices placed on ATMs, gas pumps and other widely used point-of-purchase machines — not only steal the relevant info from the card but also employ cameras to record the customer entering the PIN. This data can then be matched up so that the thief can help himself to cash withdrawals.
Until now, it’s been up to the individual card issuers as to whether or not to fully protect customers in cases of fraudulent ATM or PIN transactions, but the MasterCard decision means that all of its cards will receive this benefit regardless of issuer. So far, Visa has not commented on whether or not it will also extend this level of protection to all cardholders.
In addition to the zero-liability policy update, MasterCard is adding something called Identity Theft Resolution assistance to all of its cards in the U.S. The company says the program will help cardholders who may be victims of identity theft go through the hassle of canceling missing cards and alerting credit reporting agencies, as well as targeting searches to detect if stolen personal and confidential data appears online.