Chip and Pin technology can't stop Credit card Fraud

The dictum 'Humans are the weakest link' still hold as chip and pin security system fail to slow down fraud on credit and debit cards in 2007.

The payments body Apacs found out that frauds on cards issued in the UK surged by nearly 25 percent to £535.2 million last year, rising for the first time in three years.

Card fraud perpetrated overseas jumped by more than three quarters and now command almost 40 percent of all UK card frauds at £207.6 million.

Card fraud outside UK occurred mainly in countries where the chip and pin technology was not implemented according to the study.

Gangs are using restaurants and other venues where a credit card can be inconspicuously scanned, to grab details of the card's user and generate cloned cards which are then used in places as far as Morocco, India or Pakistan where signatures are still accepted and where the cashpoints can't distinguish between the fake cards from the real ones.

In the UK, card fraud rose 6 percent last year, thanks to the rising interest of the general public and criminals in transactions over the internet and mail order.

Sandra Quinn, director of communications at APACS, said: "Although card fraud levels have now begun to go up again due to fraud abroad and card-not-present fraud losses, chip and PIN has proven to be an undoubted success in reducing card fraud on the UK high street."

However, the toll on UK consumers could be higher especially if the sums involved are trivial and if card owners leave it late to report possible fraud.