Computer chips 'fight card con waiters'

Computer chips could help fight credit card fraud

Computer chips and credit card 'pin' numbers could help curb the record rates of fraud being blamed on waiters working for criminal gangs.

Staff at Italian, Chinese and Eastern European restaurants in Britain have been caught copying diners' details and passing them to international counterfeiting rings.

A Home Office report revealed they are the vital first stage in an illicit industry making tens of millions of pounds for organised crime, with credit card fraud hitting £189m last year.

The fraudsters are incredibly clever and can copy this stuff

Vicki Kirk, Retail Logic

Home Office minister Charles Clarke has met bank and retail chiefs to discuss tighter controls as more customers start using the internet and telephone to bank and shop.

As well as smart cards, a four-digit "pin" number has been suggested as a better way of protecting the customer and technical companies are stepping up to meet the challenge.

'Skimming' scam

The restaurant scam, called "skimming", occurs when a card's magnetic strip details are electronically copied and put onto another card.

Counterfeiting gangs then use the details to create bogus cards which run up bills for the original cardholder.

Waiters have been caught passing on details to fraudsters

The HO report, compiled by criminologist Professor Michael Levi revealed the restaurant rip offs were the vital first stage in an illicit industry making tens of millions of pounds for organised crime.

The racket has contributed to an explosion in credit card fraud, pushing the annual cost up by 40% - or £54 million - in a single year.

There is also concern over phone-based fraud, which jumped from £13.6 million in 1998 to £29 million last year, where purchases can be made without presenting the card or using a signature.

Professor Levi suggested the four-digit code could be used every time someone uses their card, as happens in France.

Thinking cards

Banks such as Barclays and the Co-operative have already started issuing smart credit and debit cards which have an in-built computer processor to help battle against fraud.

The chip can start security checks between itself and the bank if it is suspicious about how much it is being used for or how often.

They are more difficult to steal information from or copy.

Vicki Kirk, marketing manager for Retail Logic, which provides software for Electronic Fund Transfer, said holograms and magnetic strips had helped cut fraud in the past.

"But the fraudsters are incredibly clever and can copy this stuff," she said.

She said card chips, pin numbers and even fingerprint security in the future, were the new weapons against fraud.

She said customers wanting better protection needed to be aware of the new technology and encourage banks to be more proactive about ensuring card safety.