Chip and PIN technology has forced credit card fraudsters to turn to alternative counterfeit transaction methods, according to an article by The Register.
Supported in this claim by a report produced by card fraud detection specialists, Retail Decisions, it is suggested that the introduction of chip-and PIN technology, correlates with a reduction in the number of high-street store fraudulent transactions.
The research indicates that the four-digit security number that card users are required to input at the point of purchase, where chip and PIN systems are in place, has deterred high street card fraudsters who were previously unfazed by the prospect of forging a signature.
The Retail Decision report showed that fraudulent transactions in high street shops fell by 25% in the second half of 2005, the same period over which a rise in card not present (CNP) fraudulent transaction attempts saw a notable increase.
According to the report, attempted CNP fraud through mediums such as online shopping, mail-order, and telephone orders saw a 6% increase in the last quarter of 2005 compared with the previous years’ figures.
Whereas the introduction of advanced chip and PIN technology was expected to prevent card fraud, it seems to have served as a mere diversion, channeling credit card criminals towards alternative methods of fraudulent transaction.