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Monday, December 19, 2005

Chip & Pin - A Successful Year?

Chip & Pin technology was introduced in January of this year (2005) on credit cards in the UK.

So what is Chip & Pin?
Most people who own a credit card would be well used to using this when paying for goods with a credit card. Most outlets now have a PIN machine which you use to key in your PIN number. This replaces the use of a signature. Many debit cards still need to incorporate this technology onto the card.

How successful is Chip & Pin?
Well the technology will have contributed towards cutting credit card fraud by 29% this year. This equates to around £36 million pounds in the first quarter of 2005. Of course this does not include fraud over the internet, as chip & pin is not currently possible if the card holder isn't present. However most credit cards have protection against internet fraud now. Be sure to check accounts often, as you could easily miss any problems. Your first indication may be that the issuer gives you a call asking about why you have spent £4000 suddenly! This happened to a friend of mine recently, somehow even his mothers maiden name got changed, so fraud still occurs, and there is much to do to combat it.

PIN Security.
PIN numbers are sent out in tamper-proof envelopes, but it is still a good idea to change this number once you receive it. It is also a good idea to not use the same number for each card. Of course having all these numbers to remember may be quite difficult! Click here to read a method to help you remember these numbers.

Things to consider.
Try not to get your cash cards or credit card mixed up when withdrawing money. As you will now know your credit card pin number, you will be able to use it to get cash. However this is not recommended at all due to the costs involved! This happened to a family member recently, as her cards look quite similar. She was a bit shocked at the amount of interest she got charged - which in some cases is more than 20%.

Future of Fraud prevention?
There is talk of having card readers for entering your pin on the PC, but this doesn't seem feasible to me. I would think the PIN would probably be entered along with your card details on the website, if this is possible. Software exists that can call the card user if any unusual activity occurs on their account. This may be more widespread in the next year.

After fourteenth February 2006 (I <3 PIN Valentines Day) the PIN must be used to pay for anything with a chip & pin card, or you will not be able to use this card. If you do not know your pin number contact your bank immediately!


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