Chip & PIN - Fraud way up not down

baby_boomer

This is Money

"....Card fraud has leapt almost 50% since the introduction of the chip & pin system that was supposed to cut the problem.......

...........Before the change, PINs were used at some 50,000 bank cash machines. Now they are used at more than 900,000 tills, including high street stores and restaurants.

This has multiplied the opportunities for criminals to steal the PINs and the information on the magnetic strip, which are needed to create copies....."

And as a result.

"....the Home Office has decided that it is no longer the job of the police to record and investigate card fraud. Now police forces across the country are directing victims to their banks, rather than mounting investigations...."

The fraud can only go up as the recession starts to bite hard.

James

Chip & PIN Liability Shift:

Banking Code article 12.11

If you act fraudulently, you will be responsible for all losses on your account. If you act without reasonable care, and this causes losses, you may be responsible for them.

Article 12.12 goes on to say:

Unless we can show that you have acted fraudulently, or without reasonable care your liability for your card being misused is as follows etc.

If you act fraudulently then presumably this is a police matter.

If anyone believes that a card issuer has to 'show you acted without reasonable care,' think again. This is now being based on probability.

From the same article:

The surge in card fraud comes as the big banks are taking a tough line with victims and increasingly refusing to pay refunds.


Tip: You can reduce risk to yourself by getting yourself Chip & Singature Credit Cards. The down side is you can't hit an ATM, but then again neither can a crook with either your card or a clone of your card.

No PIN = no chance of being considered 'careless' for its misuse = no liability.

hippey

Unfortunatly this was always going to be the case, the liability shift from the banks to retailers and customers was planned many years ago, when chip & signature started to appear the shift began.

James

The top five breaches accounted for 93 per cent of total records compromised and as a percentage of caseload, 80 per cent were payment card breaches while payment card data represented 98 per cent of all records compromised last year.

PIN data was increasingly targeted in 2008


Article click here:

masonic

This has multiplied the opportunities for criminals to steal the PINs and the information on the magnetic strip, which are needed to create copies.....

This type of card fraud, where the card is cloned, is not subject to the problems of liability being shifted onto the customer. This really is ultimately the banks' problem and is the obvious result of using an inherantly insecure technology (magnetic strip) as a fallback position when the card cannot be Chip-read. Remove the magnetic strip from cards and this problem goes away.

I think the figure for Chip-based fraud would be very small indeed by comparison, but still significant enough for us consumers to be worried about.

James

You always read that UK cards are cloned and used to withdraw cash in countries which aren't yet Chip & PIN.

Here's another case of a cloned card being used in a UK ATM:


A WISBECH woman is warning people to be on their guard and check their bank accounts after having £100 stolen from her Norwich and Peterborough Building Society account.

They (Building Society) discovered the money had been withdrawn from a cash machine at 4am on bank holiday Monday in Buckinghamshire.

Story click here;