PIN only credit cards on way
The 40 per cent of credit card users who sign for their transactions will soon have to start remembering their personal identification number as the days of signature verification draw to a close.
Australia's financial institutions will move to PIN-only transactions in the second half of the year, in a bid to boost credit card security at the point of sale.
The move, recently authorised by the Australian Competition and Consumer Commission, is expected to save about $75 million in credit card fraud every year in Australia.
pMastercard, Visa and American Express led the push for the change, claiming fraud dropped significantly after Britain moved to a PIN-only system in 2006.
Managing director of RFI Consulting, Lance Blockley, who is heading the group overseeing the initiative, said it had become increasingly evident that retail staff were lax when it came to checking credit card signatures.
Under the Electronic Funds Transfer Code of Conduct, it is the responsibility of the merchant to check the validity of every signature.
He said consumers were sometimes made to bear the cost of the fraudulent sale if they did not inform their bank of their lost or stolen card in a timely manner. But, in most cases, it was the merchant or the bank which had to suffer the cost of signature fraud.
Australian Retailers Association spokesman Russell Zimmerman said it would significantly boost credit card security.
"I know someone who worked in the accounts department of a major company, and for several years he signed for his credit card transactions as Mickey Mouse," Mr Zimmerman said.
"He made the point very clearly that many people don't bother checking signatures closely."
