"While in-store fraud has declined, losses from fraud involving transactions via phone and Internet, also known as "card-not-present" transactions, have exploded, going from 122.1 million pounds ($198.9 million) in 2003 to 328.4 million pounds ($535 million) in 2008. Losses from fraud conducted overseas using British consumers' credit accounts increased 249 percent since 2004, according to statistics from the U.K. Payments Administration.
"The fraud rates have just shifted," says Coleman. "Chip and PIN didn't really eliminate fraud, it just moved where the fraud happens from a card-present transaction to a card-not-present transaction.""
Chip and PIN ONLY works if the person is "in person" and not over the internet with "card not present" transactions. If the card is not present it works the same as a standard card with a CSC/CVV2 number.
http://www.bankrate.com/finance/credit-cards/are-chip-and-pin-credit-c
ards-coming-2.aspx
and
http://en.wikipedia.org/wiki/Card_security_code |
