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Chip and pin is a success

Thu, 09 Mar 2006

The success of chip and pin technology has pushed criminals to committing fraud online fraud.

With the compulsory use of pin codes to make purchases using your credit cards or debit cards, fraud has been reduced quite significantly. However fraud committed over the Internet, phone and by mail order has risen dramatically in the last 12 months.

Apacs the UK payments association said this type of fraud is committed by putting the transaction through as card not present. These types of transactions resulted in £183.2 million worth of losses in 2005, which is up from £150.8 million in 2004.

The most losses were in the area of Internet banking at £23.2 million in 2005 compared with £12.2 million in 2004.

Banks are under increasing pressure to tighten up their security.

Sandra Quinn at Apacs said, "Fraudsters clearly aren’t going to give up, so neither will we.

"Now chip and pin is in place in stores, the banking industry is discussing how to use the technology to better protect card-not-present transactions.

"We hope this will lead to progress later this year."

Last year Lloyds TSB launched a new device to help their Internet banking customers to prevent their accounts being hacked by fraudsters.

The high street bank has a new device which is on trial with 23,500 Internet banking customers in an effort to head off scams.

The gadget is the size of a key-ring and generates a six digit access code for the customer to type in each time they log onto their account. The code given is a one off each time so the same code cannot be used more than once.

The devices have been a hit with customers resulting in a 100 per cent fraud free record on those accounts.
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