Overseas Card Fraud On the Rise

According to Lloyds TSB, the number of fraudulent withdrawals from foreign ATM’s is on the increase. The bank says that countries where Chip-and-Pin has not yet been introduced are experiencing a rise in cash withdrawals by fraudsters using cloned debit and credit cards.

In contrast, most UK ATM’s have Chip-and-Pin technology, which prevents fraudsters making fraudulent withdrawals using cloned cards.

Lloyds TSB started to monitor fraudulent overseas cash withdrawals a month ago and have reported a rise in these crimes during that time. Despite only recently initiating the monitoring of fraudulent card crimes, the bank stated it would not be complacent with regards to pursuing fraudsters.

A spokeswoman for the bank said: “ As fraudsters move to new methods to commit fraud, we are hot on their heels.”

Fraudsters are able to ‘skim’ or ‘clone’ both debit and credit cards by electronically copying the information stored on a genuine card’s magnetic strip, which is located on the back of the card. However, most UK cash machines now identify a customer’s card by using the chip on the card instead of the magnetic strip, and the difficulty there for fraudsters is that the chip is almost impossible to replicate. This means the fraudster is denied the opportunity to make fraudulent withdrawals with a fraudulent t card.

Most banks will refund monies to customers who have been victims of card fraud where a cloned card was used, regardless of where the money was withdrawn.

Sandra Quinn, of APACS, the trade association for the payments industry, feels the situation in Europe will improve next year when more countries introduce the Chip-and-Pin scheme.

“ Europe is a mixed bag at the moment. Some countries have chip and pin, and some have only partially introduced the technology so far. But as a rule of thumb, most of Europe will be using chip and pin by the end of next year,” she added.

For those wishing to travel to the US, bear in mind that currently Chip-and-Pin is not widely used and therefore you should be extra vigilant when using either a debit or credit card for transactions.

However, Chip-and-Pin is not immune from the fraudsters, as earlier this week saw Shell suspend the scheme at 600 of its petrol stations after it was discovered that criminals had drained £1m from customer’s accounts after they had implanted skimming devices into the pin keypads.

Alisdair Milton
15th May 2006

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