Credit Cards

Theft of Digital Credit Cards and Its Potential Liability

The advent of credit cards has changed the way people live. No longer do we have to carry cash around. With credit cards, we can easily make payments instantly in person, online and across the world. Another advantage of credit cards over cash is the protection that they provide against theft.

But this has not alleviated concerns about credit card theft, as dealing with this can be time consuming, and it can be very disruptive as well. In response, new methods of payment have been developed, all offering their own spin on protection.  It’s still clear though that nothing is tamper proof.

The desire for more secure payments is part of the reason that the use of digital payment systems such as PayPal have exploded in recent years. Attempting to take advantage of this trend, Apple recently introduced a new product that offers the benefits of both credit cards and digital payments. Called the Apple Card, some in the media have hailed it as a major advancement in secure payments.

But the truth is digital credit cards such as the Apple Card are very much susceptible to theft, leaving many consumers still preferring classically secure credit cards with security, fraud detection, and credit monitoring.

Dealing with a stolen digital credit card raises serious questions about the legal liabilities and ramifications that the victims of credit theft crimes face.

What is a Digital Credit Card?

Unlike a traditional credit card, which is typically a small piece of plastic with numbers printed on it that you keep in your wallet, a digital credit card exists only in cyberspace and you keep it in a digital wallet on a computing device such as a smartphone. As there is no physical card to steal and its numbers are not presented to anyone in public, in theory these cards can be more secure than standard ones.

The Apple Card is actually both a digital card and a physical card. While you can use the digital card through the use of a virtual number or the company’s Apple Pay app on its iPhones, you can use the physical card for purchases in brick-and-mortar stores where contactless payments are not possible. Even this is intended to be more secure than traditional physical cards, as it has no card numbers or CVV code printed on it. All this information is instead embedded in the computer chip that is located within the card.

Digital Credit Card Theft

While the Apple Card, upon its release, had been touted for its security, there have already been a number of claims of theft relating to it. Interestingly, there have been claims of theft related to all three variations of the product: the physical card, the virtual number associated with the digital card, and an Apple Pay transaction.

Of the three types of theft, the theft of a physical card was the most expected. Even with its computer chip and the lack of printed numbers on the card, it is as susceptible to cloning and skimming as other physical credit cards. The surprise was how quickly cyberthieves have figured out how to compromise the digital aspects of the card.

In one instance, a cardholder allegedly had his virtual number used by a thief at his daughter’s school, which has led to speculation that the thief had somehow hacked the school’s payment systems. Another cardholder, who lives on the West Coast, is claiming that someone in Chicago stole the number that was associated with his Apple Pay account.

So, while it may be the case that digital cards are more secure than physical ones, it does not seem that they are impervious to theft. This leads to the question as to what liabilities victims of such theft may incur and other problems that they may face.

Liabilities for Digital Credit Card Theft

According to U.S. federal law, credit card holders have a liability of no more than $50 if a thief steals and uses their card.  The card must be reported lost or stolen within two business days of noticing the card gone for this to legally apply. This law applies to all credit cards issued by financial institutions in the United States, regardless of whether the card is physical or digital. Apple, like most premium credit card issuers, takes this legal requirement one step further, by protecting cardholders against all theft. But not all digital credit card companies may offer such protections.

As mentioned previously, liability for theft is not the only security concern for credit card holders. They are also concerned with all the time that it takes to resolve issues relating to theft and with the disruptions that these issues can cause to their lives. In this regard, digital credit cards do not seem to provide any tangible advantage over traditional cards. Products such as the Apple Card may even exasperate these problems due to all the variations of products and numbers that they provide cardholders. They might also add to the complexity of keeping all this information secure.  With a classic card, the information is limited to numbers, but with a digital card, personal information can become more susceptible to abuse if an account is hacked.


While many have hailed digital credit cards such as the Apple Card as a step above standard credit cards in terms of security, they too have inherent issues. What’s more, dealing with these thefts are as troublesome and as disruptive as dealing with the thefts of standard credit cards, if not more.  Remember though, if your details have ever been stolen, it’s important to monitor your credit for suspicious activity.

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