Chip-and-pin loophole
The chip-and-pin payment method was introduced last year
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Tuesday, 06, Feb 2007 11:25
Two Cambridge University scientists have demonstrated a weakness to the chip-and-pin credit and debit card payment method.
The researchers found that it was possible to transfer account details to a third party during a transaction when a customer inserted his or her card into a previously doctored payment machine.
By creating fake cards based on the account details of the original card, criminals could then begin to steal money from the account-holder.
"We have used this as a way to show that the system is not infallible," commented Alan Holland, producer of BBC programme Watchdog which will tonight feature the researchers' findings.
"These academics are clever but there are thieves out there who are going to be equally clever but more driven."
In-depth details of the techniques used by the researchers to show the fallibility of chip-and-pin were withheld in order to prevent fraudsters from developing similar methods.
Chip-and-pin, which replaced the signature-based verification system introduced last year, was hailed as a major step in the fight against credit and debit card fraud in the UK.
Payment association Apacs responded to the researchers' findings by claiming that this method of fraud has not been used by criminals in the UK.