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Shift of liability for fraudulent transactions

This has no impact on the customer, but is a Europe wide shift involving fraud loses on transactions that could have been protected with chip and PIN. In these cases the liability shifts to whichever party hasn't yet upgraded.

Since January 1 2005, if a retailer does not have a chip and PIN acceptance device, and the use of such a device could have prevented the fraud from occurring, the retailer may bear the cost of a fraudulent transaction. This will depend upon the terms and conditions between that retailer and its acquiring bank.

Over 87 per cent of tills in the UK have now upgraded to chip and PIN. It is expected that in time all card-accepting merchants will adopt the chip and PIN system. Those who do not adopt the chip and PIN system are likely to attract card criminals who will target the weakest links.

As well as fighting fraud, chip and PIN has proved to be an efficient, secure and customer-friendly system.

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