Anti-credit card fraud initiative unveiled

Banks, building societies and retailers have joined forces for an initiative designed to combat credit and debit card fraud in the UK.

It is hoped that the 'Chip and PIN' programme will help reverse the rising tide of credit card fraud in the UK – a trend which topped a record £424.6 million in 2002.

The programme – which is being piloted in Northampton next month – will see consumers verify their purchases by keying in a four-digit PIN rather than signing a receipt and cards will have smart chips which will store information more securely than magnetic stripes. The measure should provide greater protection against fraudsters by reducing fraud on skimmed or stolen cards, which accounts for over 60% of the total.

During the trial, Northampton consumers will be prompted to use their PIN for one in every two or three transactions, using a range of debit and credit cards, and will become the UK’s first Chip and PIN users. American Express, Barclaycard, Barclays Bank plc, the Co-operative Bank, Egg, Girobank Merchant Services, HSBC, Lloyds TSB, MasterCard, The Royal Bank of Scotland Group, Switch and Visa are all participating in the trial.

Large and small shops, petrol stations, pubs, hotels and restaurants will be involved – in total, around 1,000 retailers are expected to participate.

If it is to roll out across the UK, the Chip and PIN Programme will see more than 850,000 retailer terminals, 122 million cards and 40,000 cash machines upgraded by 2005.

Chris Pearson, Chief Executive of the Association for Payment Clearing Services (APACS) said: “This is a turning point in the fight against plastic card crime in the UK. More than £1 million worth of card fraud is committed every day - that’s a fraudulent transaction every eight seconds. We’re putting in measures which will have a significant impact on this figure, will ensure better safety for UK consumers and will help take away the nightmare of card fraud."

(GMcG)