Chip and pin flaws enable credit card fraud
12 February 2010 15:59:38
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| Chip and pin technology flaws could threaten credit card security. |
The introduction of chip and pin led to a 31% reduction in counterfeit debit and credit card fraud in the first six months of 2005 compared with the same period in 2004, as well as a 27% drop in lost and stolen card fraud.
However, scientists at Cambridge's Computer Laboratory have discovered weaknesses that could allow the system to be tricked.
They found that fraudsters may insert a 'wedge' between the stolen credit card and the terminal, convincing the system that the four-digit pin tapped into the machine has been correctly verified and allowing the transaction to go through.
Professor Ross Anderson explained: "We've shown that it's easy to use a card without knowing the pin - and the receipt will say the transaction was 'Verified by Pin' even though it wasn't."
The fact that their pin was supposedly verified during the transaction process could cause additional problems for cardholders, as they may find it hard to get their money back.
However, the UK Cards Association moved to reassure consumers, telling the Daily Mail that the "complicated method" would "never present a real threat to our customers' cards".
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