Debit Cards Continued


A weakness of Debit cards - and most other plastic cards at present - is the way in which transactions are authorised. In most cases, this is done by keying a number - your Personal Identification Number or PIN - into a machine. The trouble is that your PIN is not truly personal in the way that a written signature is - anyone getting hold of your card and PIN can use your account. Therefore, efficient security is vital to this type of system: you must guard your card and your PIN, but the bank or building society should also make sure that their procedures (for example, for issuing new cards and PINs) and equipment are secure.

No machine or computer is perfect. But though most banks or building societies admit to an occasional mechanical error resulting in a cash machine paying out less than it should, they are reluctant to admit that unauthorised withdrawals are possible. So if you are the victim of a `phantom withdrawal' - a cash machine withdrawal which you didn't make appearing on your statement - the suspicion will be that you haven't adequately safeguarded your card and PIN. Yet the Jack Committee was advised of various cash card crimes: it is apparently fairly easy for a thief to overlook a customer keying in his or her PIN and subsequently steal the card. One case involved using an electronic device to 'tap' information recorded on the cash card's magnetic strip as it was used in the machine, and stolen cards can be wiped clean and loaded with a new PIN belonging to another cardholder.

The Jack Committee has recommended that banks improve cash machine security in a number of ways - for example, they should improve screening around machines to prevent customers being overlooked, and they should use computer systems to spot and monitor suspicious cash machine withdrawal patterns.

Self-defence Take steps to minimise the likelihood of your cash card (or other plastic card, such as a credit card) being misused:

- when you're issued with a PIN memorise it and then destroy the written record. If you forget your PIN, you can always request a new one

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Debit Cards

Over 35 million Debit cards have been issued in the UK and there are a further 25 million credit cards most of which can also be used to get cash. With over 12,500 cash machines available, Debit cards have generally made life easier. But they have also brought problems. The Jack Committee reported that ATM disputes (in other words, disputes concerning the use of Automated Teller Machines or cash machines) are running at a rate of one every hour in the UK. ATM disputes are the largest area of work for the Banking Ombudsman and the second largest for the Building Societies Ombudsman after mortgage... see: Debit Cards

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