By Bob Howard
Reporter, Radio 4's Money Box
Are you being sensible when you type in your Pin?
Consumer groups are calling for banks to change their approach to card fraud when a customer's Pin has been used after the theft of a purse or wallet.
Banks usually reimburse fraud victims, unless the customer acted fraudulently or without "reasonable care".
But some banks are now turning down claims, saying customers must have left a copy of the Pin with their card.
The banking industry says Chip and Pin is secure and each dispute is judged on its own merits.
Richard Elphick, a chartered surveyor, told Radio 4's Money Box he had his wallet stolen while he was eating outside a central London restaurant in July.
Although he cancelled his cards within the hour, the thief still had time to withdraw £100 cash from an ATM using his Natwest credit card, and make other purchases and withdrawals using his Natwest debit card. In total the fraud came to £2,300.
Question of liability
Natwest refunded the £100 Mr Elphick lost on his credit card, saying that as he had used the card that day it was credible his Pin might have been observed.
But it refused to repay the money taken from his debit card, arguing there had been no explanation for how the Pin number became known to the fraudster.
"Mr Elphick's debit card had not been used for 13 days prior to the theft," said Natwest.
"His exact debit card Pin was successfully used for all the fraudulent transactions. We can only conclude that Mr Elphick kept a record of his debit card Pin in his wallet."
But Mr Elphick emphatically denies his Pin number was in his wallet.
Richard Elphick wants Natwest to refund the stolen money
"They weren't written down anywhere and I don't know how anyone could get access to them," he said.
"It makes no sense to me at all, the rules should be the same for both."
The Banking Code says a customer is only liable for the first £50 in cases like this, unless the bank can prove the customer acted fraudulently, or "without reasonable care."
The banking umbrella group, the UK Payments Administration, agrees that its members must abide by the code.
"The bank or card company must be able to demonstrate that the customer has either been negligent with their cards details, or that they are a knowing party to the fraud, before turning down a customer's fraud claim."
Cathy Neal from the consumer organisation Which? believes banks need to rethink how they interpret these guidelines.
"There are just too many cases like this for it to be people actually being careless," she said.
"If people are saying they haven't been careless, you have to call into question the kind of proof that they're using."
Chip and Pin security expert Steven Murdoch from the University of Cambridge believes there are a variety of ways fraudsters could obtain Pins, from compromising Pin entry devices in shops to bank staff divulging customer details.
Natwest insists it is not possible for a fraudster to read the Pin on any of their cards, nor for their staff to ever know someone's Pin number.
BBC Radio 4's
is broadcast on Saturdays at 12 noon, and repeated on Sundays at 2100h. Download the