By Jo Best, 1 February 2005 16:30
NEWS With the deadline for retailers to have chip and PIN having come and gone, merchants are looking forward to seeing fraud dwindle - but where will the crime reappear next?
According to delegates at today's Retail Fraud Conference in London, chip and PIN may cut down some card fraud for retailers but it may actually boost crime in other areas.
Robbery was one of the favourites to mop up some of the criminal activity that chip and PIN could help to decrease.
Doug Smith of Leicester University Criminology department said: "The displacement is bank to bank robberies... Organised crime will look for an easier target."
Adrian Sherry, security solutions manager, said he expected the crime transference would mean a rise in card not present and telesales fraud.
Criminology Professor Martin Gill said: "We know offenders adapt very quickly. If you look to the European example... don't think [criminals] won't find a way round it." He added that ATM robberies are likely to become attractive to thieves after the advent of chip and PIN.
For all the claims of the death of fraud that will result from the introduction of the signature-replacement technology, some analysts warn that retailers are looking in the wrong place if they want to protect their assets.
John Davison, VP and research director at analyst house Gartner, said that retailers should be looking elsewhere if they want to stymie the fraudsters.
Last year, £400m was lost to card fraud, according to figures from payments body APACS. "Compared to the shrinkage [stock loss] figure, it's a drop in the ocean."
However, with ecommerce continuing its steamroller growth, that might be about to change. Davison added the internet is now the "most popular" method of committing card not present fraud and 12 times the amount of fraud exists on the internet than in store.
Professor Gill added that changing from offline to online fraud has both advantages and disadvantages in the criminal's eyes.
Offenders "adapt very quickly", he said. "An environment where you don't have to be present and get the goods [yourself] is a dream for them." However, he added, "immediacy is a factor" - the delayed payback for the crime may serve as a deterrent.
Comments
There are 11 comments. Join the discussion
1. MikeW
A problem with some Chip&PIN terminals - the card is apparently swiped by the retailer, then the customer is asked to key the PIN into a keypad.
Making this behaviour acceptable to the customer is idiotic.
A disreputable retailer could swipe-read the card magstripe, then obtain the PIN from the keypad entry, giving him everything required to access an ATM, since ATMs don't yet appear to have Chip readers.
Customers should only ever enter their PIN into the keypad reading their card - the card should NEVER be swiped if you are entreing your PIN.
Marks and Spencer have this kind of terminal, and the manufacturers should be reprimanded for failing to appreciate the potential for security breach that they might be encouraging.
2. koan
Seems to me that this is lazy journalism.
Chip and PIN is new in the UK, but much like the US, there are other countries in the world.
So rather than ask "Will Chip and PIN make the society more violent?" simply ask "*Did* Chip and PIN make society more violent" and then do a google on the results of the introduction of simular technology in existing countries with similar cultures.
Such as Australia, which has been using EFTPOS for years.
3. Concerned shopper
They may have cut down card fraud by implementing chip and pin but they haven’t considered the danger now faced by the individual at the counter. Anyone waiting behind you in a queue now knows your pin number and can follow you out of the shop, bang you over the head and steal or your money! Great! Thanks!
4. anonymous
Sure will -
plus now all the criminal needs to do is place cameras in retail place to get the pin number
Also the retail assistants are now able to see the pin numbers while the customer punches them in at the till!
I shopped at a number of places and the screen guards are not in place or the key pads are placed flat on the retail counter.
Someone needs to investigate how wide spread this activity is
Banks need to follow through the installation of the key pads to make sure that the customer feels secure to actually use the pin number - I can tell you I never did and was happier signing for all my purchases - ok I agree the pin & chip makes the process much faster but it is not safer in the current setup
5. John
Having been the victim of a card fraud in a restaurant, the waiter took my card away and came back with a slip for me to sign but had also taken a second impression of my card which was "signed" by god-knows-who, I would sooner use chip & pin as I have in France on numerous occasions.
The chances of another customer seeing your pin is about the same as them seeing you key it in at a cashpoint i.e. practically zero.
Card fraud in France has plummeted since they started using chip & pin.
As for an increase in card not present and telesales fraud there are easy ways to help cut this - ask for the CVV, the cardholders address. Verify both with the issuer and only deliver to the cardholder's address.
6. anonymous
I think some of these Security concerns are valid, in the states we're working a new Morals & Ethics based security solution form Omn ifabric, (www.omnifabric.com). this kind of solution offers mechnisms using hearistic algorithms that can severely limit all of the possibilities for fraud above.
7. Dean Stone
I don't see what was wrong with the system we already have. at least with a signature you can tell if it's fraudulent. I've heard terrible storys of where card companies don't refund people their stolen money because someone knew their pin numbers like an ex girlfriend/boyfriend who taken the money to screw them over.
It just sounds like to me it will save card companies and banks millions in insurance pay outs.
However if biometric fingerprinting/iris scanning was introduced with this system I would be alot more confident in chip and pin.
8. anonymous
I attempt to cover my hand closely, when using ATMs to prevent camera assisted fraud. The same technique could be used at a check out.
The moral to the ex-girlfriend problem is never give them the pin, get them an additional card, which can be cancelled!
9. anonymous
Chip and pin is a disaster! My wife recently had her PIN number read over her shoulder at the supermarket checkout and her pocket picked moments later. Within 20 minutes £500 had been taken from the local cashpoint using the stolen card. Reported to her Bank of twenty years and Police as soon as she discovered the card had gone. Six weeks after the incident, following many phone calls and multiple forms her Bank have decided NOT to refund the money ! She has been accused of being "negligent". An expensive lesson in banking policy !
10. Mr Reynolds
My wife had her purse taken from her handbag 10 minutes after using her PIN number in the Post Office counter. We had £100 taken from a cash machine within 30 minutes prior to getting home, finding the telephone number to report to the bank & police. Our bank, for 30+ years, has decided that it was our fault for not being vigilent. My concern is whether crooks are watching Post Office counters for elderly people entering PIN numbers or are there machines available able to read the chip on the card? Any current or "retired" crooks care to comment?
11. anonymous
Ah but it is the responsibility of the Card User to ensure security. If you are unhappy with the location and security refuse to enter a pin and ask to sign. Alternately ask that everyone in a 20 foot diameter circle be removed including the cashier and ask for all CCTV to be switched off.