credit card fraud :)

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  • Created on: 08-06-11 17:33
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Chip and pin technology is designed to reduce fraud by getting people to enter their pin
number at the till, rather than signing a receipt. Small retailers are, however, concerned
about the introduction of the new technology. They claim that it is expensive to install,
timeconsuming to use and may lead to an increase in fraud while they learn to use the
system. The new hitech system is intended to fight the current £400m a year of fraud
involving credit and debit cards. Despite this, a lot of retailers have not yet got the
equipment and many customers either do not have the new cards or have not
memorised their pin number. However, the Association for Payment Clearing Services
said the nationwide changeover programme was on course and going well. It added that millions of cards would be
upgraded throughout 2005.
1. Explain how chip and pin technology will fight credit card fraud. Why does the card need a chip?
2. Why do retailers fear that chip and pin cards might lead to a shortterm increase in crime, particularly
if customers are not given sufficient privacy when entering their pin number?
New developments in ICT may have further implications for credit cards. 1) You may be able to
use your credit card by simply waving your finger over it. A coil inside the card would act as a
radio transmitter and the way someone moved their finger over the card produces a signal
unique to that person. 2) Radio Frequency Identification (RFID) occurs when data stored on a
card is transferred to a checkout by a radio link. This allows much more information to be
carried on credit cards (such as a photo, or biometric details such as eye colour) and allows transactions to take
place by simply waving the card at a checkout rather than having hand it over or to put it into a keypad.
3. What information is carried on a credit card? On a traditional card, this information can be found in
two places. Explain where they are. Think about how a card is `swiped'.
4. How might the two developments mentioned above help in the fight against credit card fraud?
5. Can you think of any other ways that ICT might help in the future in the fight against credit card fraud?
Think about what you may have seen in a science fiction film ­ the technology is nearly here! Here
are some words and phrases that you might use: photo ID, hologram, biometrics, retina scan.

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