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Fraud on UK credit and debit cards costs over £1 million
every day, and you would hope never to become part of that
statistic. But if you do, all is not lost.
To fight back against card criminals, UK banks are introducing
a system in which all cardholders will use a PIN (personal
identification number) in conjunction with a highly secure
chip card. This system is scheduled to be fully implemented
by 2005 and is expected to halve predicted fraud losses.
Until then, if your card is used or stolen you are fully
protected by the UK Banking Code. The Code is a voluntary
system that sets out standards for good banking practice,
including limiting liability for cardholders that are victims
of fraud. Under the Code, if someone else uses your card before
you tell your card issuer it has been lost or stolen or that
someone else knows your PIN, the most you will have to pay,
in theory, is £50.
In practice the bank or building society will usually refund
the full amount lost. But if the cardholder were negligent,
for example, by keeping their PIN near their card, they would
have to meet all the losses.
If your card is used fraudulently but you still have the
card in your possession you will not be liable to pay for
any part of the losses. You would probably still have your
card in your possession if you are a victim of counterfeit
skimming or card-not-present fraud.
Taking care of your cards, chequebooks and PINs is essential
to help prevent fraud and protect your accounts. If you notice
any unrecognised transactions on your statement, or if your
card is missing, report it to your card issuer immediately.
To help protect yourself from becoming a victim of card fraud,
Card Watch recommends you follow these helpful tips:
- Guard your card
- Don't let it out of your sight when making a transaction.
- Carefully discard receipts from card transactions and
other personal information (shred them if possible to prevent
'bin divers' from acquiring information about you and your
cards)
- Check your statements carefully. If you find an unfamiliar
transaction contact your card issuer immediately.
- Never write down your PIN and never disclose it to anyone,
even if they claim to be from your card issuer or the police.
- When using a cash machine, be wary of anyone who might
be trying to watch you enter your PIN and do not allow yourself
to be distracted by anyone trying to talk to you.
Counterfeit is the biggest and fastest growing
type of card fraud. Most cases involve skimming, a process
where the genuine data on a card's magnetic stripe is electronically
copied onto another, without the legitimate cardholder's knowledge.
Skimming normally occurs at retail outlets - particularly
bars, restaurants and petrol stations - where a corrupt employee
skims a customer's card before handing it back, then sells
the information on higher up the criminal ladder where counterfeit
cards are made. In other cases, the details obtained by skimming
are used to carry out fraudulent card-not-present transactions.
Often the cardholder is unaware of the fraud until a statement
arrives showing purchases they did not make.
The highly secure chip cards now being introduced in the
UK will in time wipe out skimming. In the meantime, cardholders
should always keep their card in sight when making a transaction.
Card-not-present fraud occurs when neither the
card nor its holder is present at the point-of-sale, as happens
in telephone, fax, mail order and internet transactions.
This crime involves using fraudulently obtained card details
to make a purchase. Usually the details are taken from discarded
receipts or copied down without the cardholder's knowledge.
As with counterfeit fraud, the legitimate cardholder may not
be aware of the fraud until a statement is received.
The UK card industry has made available to merchants, an
address and card security code checking system, to fight this
type of fraud.
Discard receipts carefully - shredding them if possible.
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