What Effect Have Chip And PIN Had On UK Credit Card Fraud?

2005 was the first full calendar year in which every UK credit cardholder was required to have a Chip and PIN UK credit card. Having been sold on the many additional security benefits that having a Chip and PIN credit card would bring, it would seem only fair then to assess what effect Chip and PIN have had on overall UK credit Card Fraud.

The figures

The fact is, the results following the full introduction of Chip and PIN on UK credit and debit cards have been amazing. In total, UK credit and debit card fell my an amazing 25 per cent in 2005, from £505 million in 2004 to £439 million in 2005.

Why is it working?

It would seem that the reason why UK credit card fraud fell so dramatically in 2005 was for the precise reasons the credit card providers had been telling us – with Chip and PIN it is so much hard, if not near impossible, for fraudster to use our credit cards in an unauthorised manner as UK credit cardholders now had to use a personal identification number known only to them; rather than the old system of merely having to sign a receipt, details and a copy of which could then be more easily misused. Moreover, given that credit card fraud is so much harder using this new system, credit card theft, both in the mail and from our person, has also drop dramatically.

Is it all good news?

While it would be easy to get excited about the dramatic decrease in UK credit card fraud during the first full calendar year that Chip and Pin have been operating, 2005 still saw over £400 million in unauthorised fraudulent use. So, while Chip and PIN are certainly doing the job they were assigned, the problem of UK credit card fraud is certainly not over. Today, however, it would appear that we now need to be more vigilant in other areas of UK credit card fraud. For example, additional vigilance to ensure that our personal details are not stolen with ensuing internet credit card fraud is still needed. Here, sadly, the figure show an increase of 21 per cent – to £183 million - in internet and telephone credit card fraud in the UK during the course of 2005.

Remember to remain vigilant

Remember, while Chip and PIN are deterring fraudsters away from UK credit card fraud, this does not mean that you can relax the levels of vigilance you need to keep to ensure that nobody uses your credit card fraudulently. Always make sure that you protect your credit card details and that your protect your personal information. Indeed, with the new success that Chip and PIN are evidencing against UK credit card fraud, you could even argue that you need to be extra vigilant against your credit card details being used in an inappropriate way, as it may now become much harder to convenience your UK credit card issuer that it was not, in fact, you who used the credit card and that the credit card had been misused.

Richard Smith
10th July 2006

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