Card security not pinned down

Keeping your four-digit personal identification number (pin) safe is one of the basics of good personal finance - but according to reports, it still may not keep your bank account safe from the bad guys.

News.com.au states that court documents in the US show Citibank has launched legal action against a group of hackers who infiltrated the company's network of convenience store ATMs and stole customers' pins.

And although no customers in Australia were directly affected by the security breach, the incident highlights the danger of fraudsters accessing pin information by breaking into the "back-end" computers that handle cash withdrawals, the site says.

Furthermore, with figures from the Australian Bureau of Statistics showing there were 383,000 incidents of card fraud in Australia last year, card security is clearly a concern for many of the nation's consumers.

According to consumer advice site Your Privacy, cardholders can help to keep their pin safe at ATMs by checking for devices around the card slot before their put their card in and ensuring no-one is "shoulder surfing" while they enter their pin.

Consumers can also protect themselves by shredding old receipts and using a different pin for each chip-and-pin debit or credit card they use.

Nevertheless, as the US case shows, the system is not completely secure and they may still be vulnerable if their bank's security precautions are not up to standard.

Avivah Litan, a security analyst with research firm Gartner said: "Pins were supposed be sacrosanct - what this shows is that pins aren't always encrypted like they're supposed to be."

According to figures from the Australia Payments Clearing Association in the Sydney Morning Herald, charge and credit card fraud in Australia rose from 36.9 cents for every $1,000 of purchases in 2006 to 44.5 cents per $1,000 this year.

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