Fraudulent Transcation with Chip & Pin (LLoyds)

pjl_2

A friend is in dispute with lloyds at the moment with regards to a fraudulent transaction made on their credit card. Basically someone went into a store about 300 miles away and bought something for 500 using the card's pin as verification. This was only noticed when my friend got their statement. Now my friend claims that they have never used the pin to purchase anything before. The bank is stating that it is my friend's responsiblity and not theirs.
Any advice?

Rafter

If their card (or a joint card) was in their possession at the time, there is no way a chip and pin transaction could be done 300 miles away.

Your friend needs to make absolutely sure they haven't got a joint card on the account, and that the card was in their possession. They should also look back throught diary and stuff to confirm they were not in the area.

They should then go to Lloyds TSB with the facts and ask LloydsTSB to prove that this was a chip and pin verified transaction. Also go to the police and report the fraud and ask them to investigate.

The only explanation I can think of is that someone intercepted a replacement card and pin or ordered a second card and pin fraudulently. Does your friend live alone? The bank should be able to confirm whether something like this has happened, and your friend would not be liable in this situation.

R.

WiseInvestor_2

Have Lloyd's confirmed that both the card and PIN were used?

Every transaction records a code that determines how payment was received
- 'card not present' (eg. over the phone/internet)
- swiped at a till
- manually keyed by an operator
- chip & pin

The first three can be done fraudulently as it's possible to create a fake card with real numbers and even though the magnetic swipe won't work, the numbers are valid when keyed.

I suggest your friend asks for clarification from Lloyds

Galstonian

Tell your friend to have a read of this:

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_plastic_cards.htm

ronnie_2

has your friend had any luck?

have they spoke with lloyds to see if a replacement/renewal card has ever being issued along with a replacement pin no - also they should ask customer services has there been any address amendments on the account recently.

also the fraud dept should have sent your friend an indemnity form.

i take it your friend can easily prove there whereabouts when this transaction happened ie at place of work

dawn_b

i've also recently had a problem where someone seems to have used the pin number with the card, but a) i have the card in my pocket, it has never left my side and b) noone else knows my pin.

how secure is chip and pin exactly?

edit - I'm a subscriber to Which? and when I dig out my membership details, I'm going to pass this onto them as I think something rotten is going on. Do you want to be involved?

Galstonian

dawn_b wrote:

how secure is chip and pin exactly?

It is supposed to be very secure but like all systems there are weaknesses (and these are discussed at great length elsewhere on this site, it is not worth repeating that here).

If you have a dispute about a transaction then the first thing to do is use the officiall dispute process for your card issuer. This should set in montion procedures to try and ascertain exactly what happened. If you still have problems after this then you can raise the issue with the ombudsman (look at the link above).

Rafter

If the card is in your possession the whole time, there is no way it can be used for a chip and pin transaction as far as I can tell unless there was a major breakdown in controls in the banks systems.

The pin is encoded on the chip in your card. The terminal in the shop asks the card if the pin is right and the card says yes or no. After 3 attempts the card locks itself so you can't use it anywhere without unlocking it at an ATM machine.

The French chip and pin system was famously cracked about 10 years ago I think but don't think the UK is as vulnerable.

Hope your friend gets this resolved ok.

R.

zincoxide

Erm...sorry to tell you people but it is still possible to process fraudulent cards using Chip N Pin, I work within the fraud/criminal industry (not police, commercial) and obviously I'm not going to tell you how it can be done but it is possible.

Lloyds should be well aware of this, you can contact them and the company where the card was used and ask for any CCTV footage of the person paying if any, although Lloyds should be doing this for you.

Ensure you also report it to the police so they can conduct an investigation.

Someone has asked how secure it is, well, it's much better than anything the UK has had previously although it is nigh on impossible to stop the top fraudsters, they have internal links at financial instituitions and enough wealth to afford the technology used to get round other systems.

On the whole, CNP is an excellent step forward although more changes need to made, however this is being hampered by the do-gooders that resist any form of database i.e. UK ID cards etc. As well as this, the banks hide behind the Data Protection Act to cover up their failings when they should be conducting thorough security checks instead of incentivising their staff to open accounts and worry about problems later.

I could go on all day about the subject and lord knows I've got meetings from now until March regarding this subject. Only problem is, the law doesn't seem to apply to the large banks and credit providers as no-one is willing to enforce it!

Galstonian

Please, can you try and keep discussions on topic? If you want to digress and start a security or CNP thread by all means do so, you can even link to it from here.

(posted in my role as "Board Guide")

zincoxide

zincoxide wrote:

Lloyds should be well aware of this, you can contact them and the company where the card was used and ask for any CCTV footage of the person paying if any, although Lloyds should be doing this for you.

Ensure you also report it to the police so they can conduct an investigation.

:mad: Ok, so it was padded out a little but the advice was still in there. Oh, and to add to it, if you get no joy, speak to the FSA