Elaine Watson
Independent retailers could end up footing the bill for plastic card fraud when new rules making retailers, rather than banks, liable for fraud arrive in 2005, the British Retail Consortium has warned.
The shift in liability comes as banks push retailers to accept a new breed of plastic card that requires customers to key in a pin number at the till instead of signing a receipt.
If retailers do not have the card reading equipment installed by 2005, they, and not the banks, will be liable for losses incurred due to counterfeiting and theft.
BRC deputy director general Mark Bradshaw said: "Card fraud costs the banks £400m a year, so they are piling the pressure on retailers to install chip and pin enabled equipment.
"But this is a big investment for the retailer, involving new software, card readers, upgraded tills, back office systems and staff training. We're worried that patterns of fraud will migrate to retailers without the equipment  the smaller retailers who cannot afford it. We all agree there is a lot going for the new chip cards, but the liability shift is a blunt instrument."
A trial of the new technology, established in France and other European countries, starts in Northampton in March and ends in June, 2003, said Bradshaw. "That only gives retailers a few months to decide whether to install the equipment before the Christmas period. After that, we're in 2004, leaving retailers with a very narrow window of opportunity to decide what to do. Banks and merchants have to agree to a commercial case to make it worth everybody's while."
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Independent retailers could end up footing the bill for plastic card fraud when new rules making retailers, rather than banks, liable for fraud arrive in 2005, the British Retail Consortium has warned.
The shift in liability comes as banks push retailers to accept a new breed of plastic card that requires customers to key in a pin number at the till instead of signing a receipt.
If retailers do not have the card reading equipment installed by 2005, they, and not the banks, will be liable for losses incurred due to counterfeiting and theft.
BRC deputy director general Mark Bradshaw said: "Card fraud costs the banks £400m a year, so they are piling the pressure on retailers to install chip and pin enabled equipment.
"But this is a big investment for the retailer, involving new software, card readers, upgraded tills, back office systems and staff training. We're worried that patterns of fraud will migrate to retailers without the equipment  the smaller retailers who cannot afford it. We all agree there is a lot going for the new chip cards, but the liability shift is a blunt instrument."
A trial of the new technology, established in France and other European countries, starts in Northampton in March and ends in June, 2003, said Bradshaw. "That only gives retailers a few months to decide whether to install the equipment before the Christmas period. After that, we're in 2004, leaving retailers with a very narrow window of opportunity to decide what to do. Banks and merchants have to agree to a commercial case to make it worth everybody's while."
{{NEWS }}
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