Smart cards tackle fraud

The Days when shoppers who use cheque books are regarded as out- of-date eccentrics can't be far away. The pounds 85bn spent by British consumers on their credit and debit cards during 1996 represented nearly one-third of our total high street spending.

Add in cash cards, cheque guarantee and charge cards, and there are more than 90 million pieces of plastic in circulation in the UK, according to the Credit Card Research Group.

But what can be convenient to use can be just as convenient to misuse. Plastic fraud is a continuing problem and the cards do not always have to go missing. In some cases criminals have transferred details to other pieces of plastic and cardholders have not noticed anything until the arrival of their monthly statement.

This has been a particular problem for customers of restaurants in the Far East. Waiters have been known to take sophisticated copies of cards when diners are paying their bills. In the UK, counterfeiters have been demonstrating similar imagination. Last year one gang was jailed for using high-definition video cameras to obtain card and PIN numbers from cardholders at cashpoints. Another was imprisoned for obtaining card details by looking over people's shoulders.

An industry-wide solution to the problem of counterfeiting does, however, appear to be in the pipeline. The Association for Payment Clearing Services (Apacs) has been working with international card issues to develop a new type of plastic card identifiable by an in-built computer chip. If trials conducted later this year are successful, the format should be available for credit, debit and cash cards from mid-1999 onwards.

But counterfeiting, although on the increase, still accounts for only around 10 per cent of fraud. Most problems involve theft.

Total UK plastic card fraud losses reported by banks and building societies amounted to pounds 165m in 1992, although by 1995

the figure had fallen to pounds 83m - despite a 70 per cent increase in the number of plastic card transactions. Figures for 1996 may, however, show a modest upturn.

The methods used by the banks and building societies to detect stolen cards have become much more sophisticated. Spending patterns of cardholders are sometimes monitored so stolen cards can be spotted before their owners notice they are missing. Retailers have limits above which transactions must authorised by processing centres to ensure there are sufficient funds in an account and that a card is not stolen. Several high-value transactions made with a card that is used infrequently could result in an issuer instructing a retailer to check the bearer's identity. Even when purchases are made within transaction limits, cards are sometimes still automatically checked against "hot card" lists when they are swiped through electronic point- of-sale machines.

Issuers have also been improving their methods of distributing new cards, but they are reluctant to discuss the details.

Where such safeguards against fraudulent activity prove inadequate, cardholders should be well protected by law. It is the card issuer that generally faces the bulk of the cost. The industry-wide maximum that a cardholder can normally lose is pounds 50 and with some card issuers it is even less. American Express, for example, deducts only pounds 20. Furthermore, such charges are often waived. They exist primarily as incentives to ensure that cardholders act responsibly and contact their issuer promptly after they notice their card is missing.

That said, with cash cards, your bank might be less sympathetic if you kept a record of the pin number with your lost card or if you disclosed the pin number to someone. In such cases the Banking Ombudsman (phone 0345 660902) may be able to help.

If plastic card issuers are informed immediately a fraud has been detected they will often be able to readjust an account and issue a new card within days. If a case requires detailed investigation, the matter should still get sorted out within a few weeks. Cardholders should contact their issuer even if they aren't entirely certain that a card has been stolen or misused.

"Even if you suspect you might find your card again, you should tell your card issuer and they should send you a new card within a few days," says Richard Tyson-Davies, spokesman for Apacs. "They would prefer to do this than take the risk of undergoing a fraudulent loss."

It is also possible to make life more difficult for card thieves by using a card bearing your photograph. The Royal Bank of Scotland is the only organisation to offer such a facility, which is free. (National & Provincial building society stopped offering this service when it merged with Abbey National last August.)

RBS, which has 350,000 photo-card holders for its Highline multi-function card and a further 130,000 for its credit card, claims to have prevented pounds 1m in fraud by putting photos on its plastic.

A photograph, however, provides little protection when there is no face- to-face contact: cardholders are strongly advised not to give out card details when they receive unsolicited phone calls from companies they have never heard of.

Telephone and mail order transactions, where the retailer doesn't actually see the card, are one of the three main areas bucking the generally improving trend on fraud. Counterfeit cards and UK cards used fraudulently abroad are the others.

News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
Arts and Entertainment
Swiss guards stand in the Sistine Chapel, which is to be lit, and protected, by 7,000 LEDs
art

The Sistine Chapel is set to be illuminated with thousands of LEDs

News
people
News
people
PROMOTED VIDEO
News
peopleStella McCartney apologises over controversial Instagram picture
News
Gillian Anderson was paid less than her male co-star David Duchovny for three years while she was in the The X-Files until she protested and was given the same salary
people

Gillian Anderson lays into gender disparity in Hollywood

Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsA Welsh town has changed its name - and a prize if you can notice how
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
Sport
Ronaldinho signs the t-shirt of a pitch invader
footballProof they are getting bolder
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?