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Thinking of credit cards

Chip and PIN cards were introduced into the UK in 2004 and billed as the safer and fraudulent proof credit and debit card.

I wonder if the banks thought that the change would satisfy government or create more confidence in consumers to use the transaction cards.

The belief that chip and pin cards would halt or reduce fraud had to be recognized as a flawed strategy. At the same time that the UK was moving towards chip and PIN the US was moving to wave and go cards that did not even have to be handed over to merchants. And yet both types of cards carry the very important Visa or MasterCard labels on them.

Frankly, after having lived in the UK for the last 18 months and using the chip and PIN cards I don’t see how they are much more secure. While the waiter does not take your card, they do seem to watch you entering your number and who knows how that portable terminal is intercepted.

We can’t lose sight of the fact that whatever many creates, man can hack. And while there has been a 25% drop in card fraud according to the UK payments association, APACS, they certainly cannot believe that chip and PIN is the ultimate answer to thwarting fraud.

A recent article “Has Chip-And-Pin Failed to Foil Fraudsters?” in the Guardian presents some easy techniques to fool the security on the chip and pin cards.

Criminals may have cheap way to copy the chip on the card to a “Yes� card. A Yes card is a cloned card that says yes and approves any combination of four numbers entered as a pin.

Some chip readers authorize transactions locally without contacting the bank. I am aware of one such common situation that could easily be exploited by millions of people a day. I do know people that have foiled that system as well.

The magnetic strip alone could be cloned and used only as a swipe card.

Crooks can use the skim reader and small camera to record your card details and PIN as you enter it.

Crooks can use a “card catcher� to snag your card. See video below.

Researchers at the University of Cambridge were successfully able to hack a tamper-resistant chip and PIN terminal in a way t collect the card details and PINs of users. To show how they were able to freely take over the processing of one of these terminals and show it under their control the researchers modified the screen to play Tetris.

Crooks Can Steel Your Money From Your Bank And You Don’t Get It Back

Stories are surfacing, like the ones below, where consumers appear to be less protected against fraud if they have a chip and PIN card. If a thief takes money from your account using your scammed PIN the bank can refuse to give your money back, and they are. Again, this is an abuse of fair treatment of consumers according to the Banking Code. But what else is new.

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Steve

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