Since their introduction building societies and banks have been claiming that chip and pin technology is foolproof. However a new flaw at the heart of the design to prevent fraudsters from stealing your money has been exposed.
Many cash withdrawals are being carried out using cards that do not have a security chip and the shocking thing is that it is the banks themselves that are allowing this to happen.
This is how it works. Currently there are roughly 140m cards in circulation in the UK and every day an average of 7m withdrawals are made from UK cash machines. Now it is only to be expected that some of these cards will be slightly faulty therefore if banks were to reject cards with a slight fault they would then be inundated with complaints from angry customers who could not withdraw their own money.
This has left the door open to fraudsters who can use cloned bank cards that do not come with a chip to get their hands on other peoples’ cash. This leaves bank claims that the system is foolproof as completely false.
The banking industry trade association for payments has admitted that an undisclosed number of the UK’s 60,500 cash machines will allow cloned cards to withdraw money provided the cloned card is used with the correct pin number.
Because bank customers are not protected from fraud in the way that credit card holders are, account holders could find themselves fleeced of their entire balance with no redress. Not only are people finding themselves without the money to meet their home loan repayments or rent, they are going into unauthorised overdrafts and forced to borrow money to cover the shortfall.