Leader: Keep ahead of the fraudsters

The introduction of chip and PIN technology has made it tougher to use stolen or faked cards to buy things on the high street.

And without a PIN, after 14 February it'll be pretty tough to buy anything in a shop if you want to pay by card.

But there are a few exceptions. Foreign cards may not have chips, so fraudsters will still be able to use them and fake signatures to beat the system.

The flip side of that, of course, is that in countries that don't use chip and PIN the additional security of UK cards is rendered useless. This is why chipped cards will still have a magnetic stripe on the back, so they can be used abroad.

But the magnetic stripe isn't as secure as the chip - so experts are warning that counterfeiting techniques such as 'skimming' (where fraudsters make a copy of the code on a magnetic stripe) may still be with us for a while to come.

Another danger is that fraudsters have been quick to change tactics and start committing card-not-present fraud. As more people rely on the internet and telephone shopping, there are many slimy fish slipping through the retail net.

Banking industry body Apacs said last year that it would have a standard for authenticating online and telephone transactions by the end of 2005. We're still waiting for that but apparently it's 'more or less there'.

Chip and PIN is a great leap forward in anti-fraud technology. But rather than allowing fraudsters to simply learn new tricks, banks and retailers have to remain vigilant and stay one step ahead.

This is especially true of new channels such as internet shopping. No one wants to cheer a crackdown on fraud in one area, only to see it spring up as big and bad as ever in another.

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