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Home > > Business General > Legislation > Chip and PIN regulations

Chip and PIN regulations

With effect from 1 January 2005, under the so-called 'liability shift', retailers who do not use the new Chip and PIN payment system could now be held liable in the event of fraudulent transactions which take place at the point of sale.

The Chip and Pin system aims to ease the growing problem of credit card fraud, which costs the UK hundreds of millions of pounds every year.

Under the system, when cardholders purchase goods using a credit or debit card, they are required to type a four-digit pin number into a keypad, rather than signing a receipt.

Retailers who comply with their card issuers' instructions under the new system will be covered in the event of fraud.

However, those choosing not to adopt the Chip and PIN system could be held responsible for any ensuing losses.

The Forum of Private Business (FPB) has urged small firms to comply with the regulations, warning that those who choose not to use the technology could be targeted by fraudsters.