The Bankwatch

Tracking the consumer evolution of financial services

The Retail Bulletin – Chip & Pin reduces fraud, but fraud continues elsewhere

The opening sentence in this quote sums up the weakest link approach that criminals follow. Nonetheless, it appears that chip and pin is reducing card fraud in the UK so far.

But rather than reducing fraud in total, identity fraudsters have simply shifted their activity to areas that Chip and PIN does not protect.

The first signs came in the cheque fraud figures which showed a rise of 50% in the first six months of 2004, compared with the same period in the previous year. But the cost of cheque fraud is dwarfed by continuing card fraud. “It would be nice if they could pack up their bags and go home, but they are unlikely to and, unfortunately, they will go to another area that is vulnerable,” said Sandra Quinn, an Apacs spokesman. She correctly forecast that card fraud would reach £500m in 2004 (actual figure £504.8M). “We are hoping for containment,” said Ms Quinn. And in 2005, overall card fraud fell back to just under £440M, an early success for the Chip and PIN rollout.

Source: The Retail Bulletin – The complete retail news resource


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Written by Colin Henderson

November 20, 2006 at 16:24

Posted in Chip Cards, Security

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