Chip and PIN 'open to fraud`

Anyone using a chip and PIN card to withdraw money from cash machines in the UK will continue to be at risk from fraud, despite being forced to use PINs for all transactions from next February, The Observer reports.

The Association of Payment Clearing Services (Apacs) announced last week that from 14 February, UK retailers will no longer be able to accept a signature instead of a PIN - the standard default option for cardholders who have forgotten their PINs.

But Apacs told The Observer that the majority of ATMs would continue to read the magnetic stripe on the back of a card instead of the chip, meaning cardholders will still be open to fraud from cash machine "skimming".

The fraud typically works by con artists using a false front on a cash machine to clone a card`s magnetic strip and recording details of the PIN by using a tiny camera. It has not been halted by chip and PIN technology because most ATMs still read the magnetic strip on the back of the card as an alternative to the chip, enabling cloned cards that just have the strip to be used around the country.

Eight secondary schools in Lisburn, Northern Ireland, are running a pilot smart card scheme as part of the Online Northern Ireland e-government strategy in the province, reports SiliconRepublic.com.

About 6 500 pupils will participate in the project, which is aimed at reducing the need for them to carry cash.

Every student will be issued with a photographic smart card fitted with a microchip that carries data as well as an electronic purse that will allow pupils to pay for school meals, borrow library books or use leisure and sports facilities in the local area.

The US Interior Department`s National Business Centre is establishing accredited procedures for issuing smart card identity credentials for itself and other federal agencies to use when the cards become mandatory in October next year.

FCW.com reports that according to an 18 October solicitation notice, the Office of Management and Budget has authorised Interior`s business centre to issue the cards. The department is seeking bids for smart cards and related services that will comply with federal security and interoperability standards. Smart cards based on those standards will be required for agencies` compliance with Homeland Security Presidential Directive 12.