Fighting Fraud With Chip & Pin Credit Cards
Since their introduction in 2003, chip & pin credit cards have become a familiar addition to wallets and purses throughout the nation. By the end of 2005 it is estimated that all of us who use credit cards will be in possession of chip & pin cards. Old cards, where a signature is required to sign for goods and services, should become obsolete by early 2006, paving the way to a society where signature fraud is a thing of the past.
What are chip & pin credit cards?
Chip & pin are a safer generation of credit cards. Companies and the government see cards containing chip & pin technology as the answer to over-the-counter fraud. Instead of relying on counter staff to check till roll signatures of customers against the signatures on their cards, chip & pin requires the buyer to input a 4-digit pin number into a keypad at the counter. The point of sale keypad is linked to a verification system, which checks that the pin number entered matches the code registered. This is done securely courtesy of a 'smart chip' embedded in the cards.
It is envisaged that chip & pin will offer consumers greater protection from credit card fraudsters. No longer will fraudsters be able to mimic signatures - something that is relatively easy for criminals to do. Neither will the burden of verification continue to fall on the shoulders of till operators, many of whom do not have the time to analyse in depth the validity of scrawled signatures against those on the back of traditional credit cards. In short, chip & pin will make the UK a safer place in which to use credit cards for over the counter purchases…but will that stop the fraudsters from illegally using your cards in other ways?
The limitations of chip & pin credit cards
Whilst it is true that chip & pin cards are more difficult (and a lot more costly) to counterfeit, fraudsters can still defraud you by way of your chip & pin. One of the easiest ways credit cards thieves can do this is to use your chip & pin card online.
No barriers exist in the world of e-commerce to prevent a fraudster running up bills on your credit cards by ordering products and services online. All they need is the long number across the front and away they go!
Some measures are in place to try to and pick up on this fraudulent use. For instance, many online retailers who accept credit cards insist that the purchaser states the 3-digit security number printed on the back of their cards in order to validate the purchase. Also, card companies themselves have become a lot more vigilant. If they detect some 'unusual' activity on your credit cards, they'll contact you to make sure that you've authorised the purchases in question. If you haven't then the cards involved can be cancelled there and then.
Even though both systems are successful in reducing the use of credit cards by fraudsters, neither can catch all of the crimes all of the time.
Still, no matter what is said about chip & pin one thing is for sure -- they are here to stay. And, not even the most ardent opponent of them can deny chip & pin the bare facts. In France, where chip & pin were introduced in the 1980s, card crimes fell by more than 80% almost immediately!
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