Criminology (Risk & Security Management) Essay Example | Topics and Well Written Essays - 2250 words

Criminology (Risk & Security Management) - Essay Example In the year 2004, APACS, which is the United Kingdom payments association representative of the card issuers, had introduced a new industry standard. This was done to prevent fraud relating to ‘plastic cards’. This standard made it mandatory that a microchip be embedded inside the debit and credit cards. Moreover, a 4-digit Personal Identification Number (PIN) was to be used by all the consumers in order to carry out any transactions. Henceforth, the standard was named â€Å"chip and PIN†. Formerly, the credit cards that were being used in the United Kingdom were designed like those that were used in United States. These cards had a magnetic strip which needed to be swiped through the magnetic reader. The receipt was then signed by the consumer to acknowledge the transaction. (Neal Walters, 2006) Indicators suggest that this new standard played a substantial role in cutting down the credit card fraud cases. France also used a similar technique to overcome this problem. It is said that credit card fraud cases have reduced by 80% in France now. Although, these statistics are very encouraging, there still are some problems relating to the chip and PIN system. (Neal Walters, 2006) When a card is to be used and has chip and PIN technology, the customer first has to insert the card into a card reader which can access the microchip inside it, also known as PIN pad. If the PIN pad authenticates the card, the consumer is asked to insert the 4-digit PIN. If this Pin matched with the one in the card, the transaction is completed successfully. However, the chip and PIN system may not be used over the Internet or telephones. It may also not be used in case of mail order transactions as the customer’s presence at the time of sale is required. (Neal Walters, 2006) Decline in various types of credit card fraud was observed after the introduction of chip and PIN system in United Kingdom. These types included account takeover fraud