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Credit cards and debit cards are viewed as relatively secure
methods of making purchases; however as with any security measure
there are people who will try to find their way around it. Various
increasingly complex methods have been devised to access bank
accounts by obtaining the consumer's details such as scanning and
copying the electronic strip on the back of the card to create
duplicates which can be used to siphon off funds.
Chip and Pin was devised as a means of making it much harder for
criminals to make useable copies of bank or credit cards, and so
significantly reduce the security risks surrounding card
transactions in the UK. The system has been hailed as a major step
in crime reduction.
According to consumer finance comparison site Moneynet, "the
introduction of Chip & PIN has contributed to the rising
popularity of debit and credit cards. Two-thirds (63 per cent) of
people surveyed by A&L say they prefer to pay by plastic on
most occasions and 11 per cent attribute this to Chip &
PIN."
Unfortunately, after only a few months since the compulsory
universal conversion of all cards in the UK to the chip and pin
system, stories are now emerging of ways which the chip and pin
security is being breached.
The petrol station giant, Shell, has recently suspended all
chip-and-pin payments in 600 of its UK petrol stations following
the fraudulent removal of over £1m from customer accounts. The
criminals are reported to have managed to get into "tamper
resistant" Pin pads, in order to commit their theft. As a result
payments have been reverted to the supposedly less safe card swipe
and signature system.
The Association of Payment Clearing Services (APACS) has been quick
to highlight that the fraud is only related to just the one petrol
chain, although two BP filling stations in Worcester were recently
temporarily shut down as part of investigation into a scam where
£250,000 was taken from 167 people after using the stations and
then shortly after, their credit card details were used in
Bangkok.
Although chip and pin, by making customers verify transactions
using a pin number rather than a signature, has made it harder for
criminals to use stolen debit and credit, industry figures show
total card fraud in the UK fell by 13% to £439m last year, with
card counterfeiting along with lost or stolen card fraud dropping
by 24% to £58.4m, fraudsters have already discovered several other
ways to get round the tougher security.
These days, with internet and phone shopping, fraudulent
transactions can even be completed in a variety of ways with just
the card number. "Criminals are increasingly turning to the
Internet to relieve consumers of their money and goods as the
introduction of Chip and Pin cards has made credit card fraud
harder," said Moneynet chief executive Richard Brown.
There has also been an increase in criminals copying bank and
credit cards in the UK and then using them in smaller shops that
cannot afford the chip and pin payment devices, or by taking the
card abroad where chip and pin is not as prevalent and so they can
bypass the additional security offered.
In response to the new threats, the major card providers are keen
to reassure consumers. Lloyds TSB has said that it has moved to
close the gaps in its security system, and anyone who had lost
money through the fraud would be reimbursed.
Barclaycard advises bank and credit card
customers to, "Check your accounts regularly. Look for transactions
you don't remember making or recognise. If in doubt, note the
details and report it to the helpdesk immediately."
Disclaimer:
All information contained in this article, is for general
information purposes only and should not be construed as advice
under the Financial Services Act 1986.
You are strongly advised to take appropriate professional and legal
advice before entering into any binding contracts.
Submitted by:
Michael Hanna
About Michael
Michael is a keen writer, and internet marketer living in
Scotland:
Contact details:
E-mail: samqam@googlemail.com
Phone: 0131 561 2251
Michael's Website:
Taxi Belfast Airport
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Credit card fraud has dropped by almost a third since the introduction of chip and pin security, according to the scheme's organiser the Chip and Pin Programme.
Thinkpad Author:
Michael Hanna
UK online bank Intelligent Finance (IF) has ditched its credit card offsetting system because of the high costs of moving to chip and pin technology.
Microsoft About Michael
The chip & PIN (Personal Identification Number) system replaced the old system of customers signing a receipt for payments by debit or credit card on 14th February 2006. Now customers enter a unique four digit number (the PIN) to identify they are the card holder. All new debit and credit cards issued will use chip & PIN technology. The cards work by using a chip embedded in the card which holds encrypted information verifying that the PIN number you enter is correct. Your PIN number can also be used at cash machines when you draw money out.
Laptop Computers Michael is a keen writer, and internet marketer living in
Scotland:
In an attempt to reduce fraudulent card use, MasterCard, Visa and Europay agreed to introduce a chip and PIN (Personal Identification Number) system. This means that when you use your credit card, you will be asked to enter a PIN that matches the chip embedded in your card. When France introduced a similar security system, domestic fraud fell by 78%.
Laptop Computer Contact details:
- Chip and PIN is a secure card payment system which has been introduced to help prevent fraud. digit PIN.
Desktop Computer E-mail: samqam@googlemail.com
Phone: 0131 561 2251
Notebooks Michael's Website: Belfast
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