Jun 23, 2010, 3:52 GMT
Wellington - The Bank of New Zealand (BNZ) said Wednesday that it had acquired worldwide patents for technology that stops criminals from skimming debit and credit card at automatic teller machines (ATMs).
Skimming captures magnetic strip information on cards by illegally modifying payment devices or through separate card readers. Fraudsters can also capture PIN data and create dummy or clone cards they then use to drain the victim's account or make illegal purchases.
The bank said it had invented and developed technology called Liquid Encryption Numbers or LEN, which had the advantage of not requiring customers to get new cards but just to visit a bank ATM.
'On standard bank and credit cards, the information stored on the magnetic strips is static and doesn't change,' LEN's inventor, the bank's fraud expert Michael Turner, said in a statement.
'With LEN, we've made that information dynamic so that it changes every time a customer visits a BNZ ATM,' he said. 'This means if criminals copy the data on the cards, they won't be able to use it for fraud.'
Skimming was on the rise around the globe with 1-in-5 consumers being hit by debit- or credit-card fraud over the past five years, according to ACI Worldwide, a global provider of application software for electronic payments.
The bank's chief information officer, Peter Yarrington, said the most common form of card fraud had been halved since LEN was introduced to New Zealand customers over the past two years.
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