Chip and pin could cut card fraud

Microchips could help foil credit card cloners, who are becoming increasingly sophisticated, says the deputy chief of Dubai Police.

DUBAI // A senior police official has called on the Central Bank to order the introduction of credit and debit cards with microchips to help cut fraud. Major Gen Khamis al Mazeina, the deputy chief of Dubai Police, said the "smart card" system used in other countries could be an answer to increasingly sophisticated credit and debit card fraud. "In 2006, US$700million [Dh2.57 billion] in losses were produced in credit fraud and that has put a huge burden on companies," Major Gen al Mazeina said. Under the system, known in Britain as chip and pin, the cards are verified using a secret personal identification number - or pin - when paying for goods. "Fraudsters will then have no gain from cloning cards because even if they did, and were able to obtain the cardholder's information, they will be unable to make a purchase," said Gen al Mazeina. "Some customers may find it inconvenient in case they forget the pin number, but for security reasons it will secure the card owner in the event their card was lost or stolen, as it will prevent anyone else from using it." Gen al Mazeina was addressing a round-table discussion entitled The Security of Financial and Online Transactions. He made a number of recommendations to representatives from the Central Bank, the bank industry and police officers, including a call for tougher penalties with electronic crimes. He described to the summit an ATM scam where the thief inserted a sticker inside the card slot, which trapped the card of a customer and made them think the machine was faulty. Gen al Mazeina said the thief, posing as a bystander, would advise the victim to re-enter the pin and retrieve the card. The thief would memorise the number and return later to grab the card and withdraw money. A representative from a major UAE bank said his company had come across many incidents of credit card fraud with transactions made in shops. He said investigations had been thwarted by the lack of security cameras in those shops and said retailers should be encouraged to have them installed. He added after the meeting: "Chip cards are widely used in Europe. It's safer and I think it should be implemented here." But Abdullah Khazim, a manager from the Emirates-NBD Bank, called for more internal and international co-operation in the fight against card crimes. "We have reached a stage where card fraud has become an industry," Mr Khazim said. "There should be more co-operation between all parties involved to stop this. Introducing the chip may help reduce the problem but it will not eliminate the crimes." [e-mail]