Page last updated at 08:46 GMT, Tuesday, 8 March 2005

Q&A: Preventing card fraud

A card skimming device being attached to a cash machine
Fraudsters are targeting cash machines
Credit and debit card fraud rose by a fifth to 504.8m last year, figures published by the payment industry body Apacs have revealed. Here's how you can keep your cards safe and protect yourself from different types of card frauds.

Is preventing fraud just a case of keeping my credit and debit cards safe?

It does help to keep your cards safe.

A great deal of fraud arises from teams of thieves stealing cards and then going on a spending spree before their owners wake up to the fact that they have been robbed.

But picking peoples' pockets is a high visibility crime and there is a reasonable chance of being caught.

Many fraudsters prefer to employ more sophisticated - some would say "white collar" - techniques to commit their crime.

So if the main threat isn't teams of pickpockets, what should I be on the lookout for?

In short, be very alert any time that someone wants to take your card out of your sight.

During recent years, the major way that fraud has been carried out has been by card "skimming".

Skimming is a process whereby the data from a card's magnetic strip is electronically copied onto another card.

This fraud is often carried out in restaurants, shops and petrol stations - you hand over your card and a replica card is produced and used, sometimes on the other side of the world.

Skimming UK cards nets fraudsters more than 100m a year.

Fraud carried out when cards are not present - over the phone, mail order and via the internet - is also still common, accounting for 150.8m a year.

What steps can I take now to stop myself falling victim?

The Cardwatch site, set up by Association for Payment Clearing Services (Apacs) to increase awareness of card fraud, calls on people to be vigilant.

Cardwatch advises consumers never to let cards out of sight and to check receipts and bank statement thoroughly.

What is more, they advise consumers to go to the drastic step of shredding all their card receipts.

Disturbingly, a card receipt is all a clever fraudster needs to reproduce a replica card.

You are at most at risk when the fraudster can easily guess your card Pin number.

Avoid using easily traceable facts about you - such as your date of birth - as your Pin number.

In addition, have a different Pin for every card. It may be a pain to remember all the numbers, but it will make the job of the fraudster very difficult indeed.

What about protecting myself while using a cash machine?

The advice from security experts is clear.

If you suspect that the cash machine you are about to use has been tampered in any way then walk away and report your suspicions to the bank or machine operator.

Common cash machine fraud includes using skimming devices, which copy card details, and miniature camera devices, which record cardholders' Pins.

Often fraudsters hover around cash machines, spying on users in a bid to capture their PIN numbers.

A person entering a PIN number
Cash machine users have been urged to protect their PINs

In response consumers are advised to cover the hand they are using to enter their Pin.

All sounds terrifying! What happens if I do fall victim to credit or debit card fraud?

The law states that cardholders are not liable for fraudulent transactions as long as the original card is still in their possession.

Any bank or business turning down a refund request is on very shaky legal ground.

The problems arise when a card is stolen or lost and is then used fraudulently.

Under these circumstances according to the terms of the Consumer Credit Act and the Banking Code you are liable for damages up to a maximum of 50.

However, an Apacs spokesperson said that banks often waive the 50.

If the banks end up shouldering most of the bill for fraud why haven't they cracked down hard?

UK banks say that they are making great strides in confronting the fraudsters.

After extensive trials last year UK banks are introducing Chip and Pin technology.

Chip and pin cards aim to cut fraud by including a smart chip, which can store more information than the usual magnetic strips, and also by having users verify transactions by keying in a pin number rather than signing a receipt.

Latest figures from the Chip and Pin Programme show more than 90 million new cards have been sent out.

The aim is to switch all UK cards to Chip and Pin by the end of 2005.

A similar programme was launched in France more than a decade ago and card fraud fell by almost 50%.

If this system is so wonderful, why has cash machine fraud nearly doubled?

Apacs has suggested that the surge in fraud represents a last hurrah for the card fraudsters.

Chip and Pin is going to make life a lot harder for the fraudsters and they have stepped up their activities to exploit the weaknesses of the current system.

However, the hope that all fraud will be brought to a juddering stop once all cards are Chip and Pin may prove forlorn.

Apacs revealed in June that fraud following cards being lost or stolen in the post had risen by more than a half in the past year.

Many of these cards were Chip and Pin and were stolen along with their Pin numbers.

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