Millions of consumers to get home pin machines from banks

Several months ago Barclays Bank announced that many of its customers would be receiving home pin machines for use when making online banking transactions.

Now it seems that he majority of other major banks are going to follow suit in a bid to try and reduce the levels of online fraudulent activity. Online banking fraud rose by nearly forty five percent last year, costing a staggering £33.5 million, and banks hope that these devices will reduce the risk of further rises in this type of fraud, and will actually bring online banking fraud levels down.

Chip and Pin credit and debit card readers at high street retailers have proven successful in the eyes of the banks, helping to cut down on card fraud. Banks are now hoping that the same sort of device used in the home will have a similar effect on levels of online banking fraud. Barclays has the biggest programme for these readers in place, and Lloyds is trailing the system on thousands of customers.

A spokesperson for Lloyds stated: 'We've been running trials for over a year and the feedback from customers has been really positive. But we haven't made a decision yet whether to roll it out to the rest of our four million Internet banking users.'

Many other banks will be following suit, although HSBC and First Direct, its online subsidiary, are not planning to introduce the scheme yet.

An HSBC official said: 'Online banking fraud is not an issue for our customers. We have significantly lower internet fraud than most major banks because we do a lot of back-end monitoring, and we are upgrading our security.'

The small handheld devices provide users with a unique code each time the debit card is inserted and the pin number entered. This code is then entered into the bank's website – it will be a different code each time the debit card is inserted into the device to cut down on the risk of banking fraud. Barclays is set to start sending out the readers from July, and some banks such as RBS and NatWest are starting to send them out already.

Tom Smith
8th June 2007