Originally Posted by
Kettering Northants QC
Hmmm, this is an objective article isn't it? It reads like a Michael Moore investigation.
Yes, it is an objective article. The Cambridge researchers who produced it may have come to different conclusions than you after presumably much more detailed study, but that does not make them biased anymore than your conclusions show evidence of your own bias.
The article does not, in my opinion, make any proven point on shift of liability it pontificates on what appears to me to fictitious scenarios. There is no case-law as I can see relating to the new chip and pin system, where there is on reasonability - for example under the old system leaving your credit card lying about was insufficient.
There is nothing fictitious about these scenarios whatsoever. The same group of researchers has a
long list of cases where cardholders have disputed phantom withdrawals allegedly made with their card and PIN, while the bank in many cases argue that the use of the PIN is ipso facto evidence that the cardholder has not used reasonable care, or worse, is attempting to defraud the issuer.
There has been at least one case of a cardholder being convicted of attempted fraud simply for disputing unauthorized transactions! It was reversed on appeal, but few will have the resources to defend such a case.
The only thing that Chip and PIN changes is that now there will be many more transactions done with a PIN.
Fact: There has been no change in liability to the cardholder, to the retailers in some circumstances yes, but not to the cardholder.
Fact: In practice, there has been a change in liability to the cardholder in some circumstances, and to the retailer in others. In short, this greatly reduces the fraud liability of card issuers, which also reduces their incentive to make their systems secure.
The signature system is no better than chip and pin. A signature is usually easy to copy and can be very difficult on its own to prove that it is or is not genuine.
That is exactly why the banks cannot rely on a signature exclusively to prove that the cardholder is liable. They argue that PIN use can do this, however.
I have a long hand signature and a short signature and I have by accident, in the past, used the wrong one when using a credit card - what happened? Nothing, never once- yet the signatures looked completely different.
The signatures will not be checked by anyone other than the retailer unless you dispute it. If you did so, you would almost certainly be refunded in the case of a fraudulent signature transaction. Not so with Chip and PIN.