About a third of all credit and debit card fraud comes from lost or stolen cards enabling fraudsters to fake your signature. That's beginning to change.
Last week my first Chip & Pin card arrived in the post. I haven't had a chance to use it yet but from now on, I should be able to use my secret Personal Identification Number for retail card transactions instead of writing my signature on a receipt.
By the time the scheme is fully rolled out by banks and retailers at the end of the year, we'll all be punching our PINs into a special keypad at the till instead of signing slips of paper. It'll mean that if a fraudster nicks your credit or debit card, it'll be useless practising the signature on it as he'll need to read your mind for the PIN to get anywhere with it. (As long as you haven't written it down and kept it with your card, of course!)
The signature system has long had its shortcomings and it's not just that fraudsters find it easy to fake a signature. New research from Lloyds TSB
(LSE: LLOY)
has revealed that three quarters (76%) of people claim to have signed a transaction slip in a store without the signature even being checked by the person on the till. So it's no wonder that one in three people have fallen victim to debit or credit card fraud at some time.
After all, the only thing the personal assistant, Joyti De Laurey, needed for her £4.3 million theft from her bosses at Goldman Sachs, was a pen. Before she was convicted of 20 counts of fraud last week, it emerged that she had forged more than 70 cheques over a period of just four months.
As long as cheques are still in use the new Chip & Pin system won't stop the De Laurey type of fraud but with more and more people using cards for their day-to-day transactions in the High Street, it'll go a long way towards making life more difficult for fraudsters.
Make sure you play your part too though:
- Don't keep your PIN with your cards. You can change it to a more memorable number so you don't have to write it down;
- Never disclose your PIN to anyone else;
- Keep your receipts to check against your monthly statements so that you can report any transactions you don't recognise;
- Report all instances of lost or stolen cards immediately
More: Safer Credit Cards Are Here; Keep Your Cards Safe
Jane holds shares in Lloyds TSB.
