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Britain: a new record for card frauds

Date: March 15, 2005
Source: Computer Crime Research Center
By: CCRC staff

According to the Association for Payment Clearing Services (Apacs), the clearing association, criminals stole almost GBP 500,000,000, despite the introduction of new protection technologies. Security experts believe that introduction of microchips and 4-digit personal identification numbers - PINs in retail outlets would have decreased the trend. However con artists began to steal even more cards that were often stolen on their way to owners.

In the whole, the level of debit and credit card fraud soared by 20 per cent to 500 million last year and made up approximately 10 stolen pounds per each grown up citizen. Taking into account that up to 100,000 of plastic cards are mailed to clients daily, losses at mailing stage rised by 62% and reached GBP 73 million. Even after this, card owners hesitate to get their cards in the nearest bank department and still order them by mail.

The theft of card details to buy products over the phone, via mail order or over the internet — so-called "card-not-present" fraud — topped the table of losses, rising by 24 per cent to 150 million.

Under the Barclaycard scheme, consumers will have to enter their card’s four-digit PIN into the security device before making a purchase. After verifying the number the machine will issue a unique eight digit code that consumers have to type online. The code can be used once only.

Barclaycard said the machine will not retain any card details that could be exploited by thieves. Eventually, it is hoped that the device will be used for mail order shopping and internet banking.

Apacs said that complex negotiations between banks, credit card issuers and retailers would be required for the introduction of the new scheme. A spokesman for the association said: “There are still many questions, like: Who would provide the pocket device? Would it be free? Could you pick it up from your bank or have it sent to you in the post?”

Barclaycard suggested that the security devices would be given to its customers free. “We would not want to make it difficult for our customers to participate in the scheme,” a spokesman said.

But the scheme has already faced criticism. One argument against it is that consumers are already overloaded with mobile devices such as phones and Blackberrys and might be reluctant to carry another device.

It is also feared that consumers may find the new system hard to understand.


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