Chip and PIN System
The introduction of Chip and PIN (Personal Identification Number) verification should help reduce debit card fraud. Since 14 February 2006 every debit card issued in the UK features the Chip and PIN verification system – except in very specific circumstances, such as if you have a disability and request to continue using signature verification. When you pay for goods and services in person with your debit card, you will enter a four digit PIN to verify that you are the cardholder. It works in the same way as a PIN used to withdraw money from an Automated Teller Machine (ATM).
Chip and PIN reduces fraud thanks to point-of-sale transaction; that is, one in which you and the retailer are both physically present. When you make such a transaction two elements are verified. The first is the authenticity of the card itself, the second is your presence. The physical chip on your card helps verify the authenticity of the card, whilst the PIN verifies that you are the owner of the card. The chip itself is the gold or silver square on the front of your card. It gives your details to the point-of-sale terminals in shops, stores, supermarkets and garages to verify the authenticity of the card, and the PIN you enter ensures that you are the rightful owner of the card and have the right to access the funds: in this way, the point-of-sale and Chip and PIN systems help decide whether or not to authorise the transaction.
In the event that your card is lost or stolen, the criminal has to know your four digit PIN to be able to make a transaction in person. If they enter a false PIN more than three times your debit card is 'locked' and can only be unlocked by your bank or building society, or by entering the correct PIN at a cash machine or ATM. In the past, a lost or stolen card could be used fraudulently more easily, as the criminal could simply copy your signature to 'verify' that they were the cardholder – the cashier had only to ensure that the cardholder was actually present ny accepting this signature as genuine. Chip and PIN should have the advantage of putting technology in charge instead.
You should never reveal your PIN to anybody else, including bank staff and the police, or people you speak to when making a transaction via telephone. This ensures that in the event that your card is lost or stolen, criminals will find it difficult to authorise a transaction. If you wish to change your PIN, you can usually do this at any one of your bank's cash machines across the UK, by selecting 'additional services' when prompted.
Remember that Chip and PIN is only used for transactions that you make in person. Any mail order, internet, or telephone purchases will not require a PIN. You should protect yourself in other ways if you use 'card not present' services.
