British Expatriate Network

For part of the Fraud aspect of my job we had someone come in and explain general Fraud practices across the globe with regards cards to the whole department. We have these twice a year to talk figures and standard practice. The basic point about Chip and PIN was that it changes the liability from the card company to the card holder - thereby reducing the amount of fraud a card company has to report officially. Genius.

But the part that got my goat was when the speaker said, "and guess which country doesn't think it's worthwhile?" Cue lots of rolling of eyes and jibes that "America doesn't think they have to play like everyone else." The speaker asked why anyone thinks this is the case because they genuinely didn't know. Cue me and a Fraud specialist from Florida who works with us here. We pointed out that the Federal government cannot tell individual states what to do - states rights and all that. I pointed out that whenever I've used my credit card I've always used a PIN anyway. No need for a chip at all. The Fraud specialist made the argument that spending the hundreds of millions on it was an entire waste because it doesn't reduce fraud in any way(it's gone up incidentally - alot) and as far as the US is concerned, it's effectively in place anyway.

The speaker remained unconvinced and suggested the US simply doesn't want to pay for it. Am I missing something here? The Fraud specialist was very clear that Chip and PIN has done absolutely zero for fraud, and that it was actually based on the US model of pins with credit cards anyway.

Any thoughts? Had any probs with Chip and PIN?

I first heard of and used pins with Credit cards in France, probably a good 15 years ago.

From what I've read, chip and pin is as you have described it - it shifts liability to the consumer and has done nothing to stop Fraud.

In the US, as I understand it, using you pin number does the same. I never use it, I always sign. My understanding (given to me by my bank) was that a signature places liability with the retailer.

The logic behind chip and pin, from recollection, was that it would stop card cloning because chips were to expensive and to difficult to clone. Turns out that was not true.

However, I think the states rights argument is misplaces. Banking regulation is federal as well as State. They could impose chip and pin if they wanted to (remember the electronic check law a couple of years back). The Banks would object on cost grounds and are powerful lobbyists. However, given the fiasco in the UK, I can't imagine anyone here mounting any campaign for chip and pin in the US.