FPB: Banks heap chip and pin chaos on businesses

The looming crisis threatening to swamp the introduction of Chip and PIN technology is entirely the fault of the banks which have aggressively driven the scheme before retailers and consumers are ready, a leading business group said today.

The Forum of Private Business (FPB) warned the banks in October that they needed to delay the January 1 2005 deadline to avert chaos. The launch of the system is being seen as the biggest change for businesses and shoppers since decimalisation.

The FPBís Chief Executive Nick Goulding said the banks are guilty of greed, complacency and incompetence.

The FPB has been deeply concerned for some time that Chip and PIN is being crow barred in by the banks, which are desperate to transfer liability for fraud,í he said. Retailers must realise that from New Years Day if they continue to accept signature payment rather than PIN they will shoulder the cost of any fraud, not the banks.

Mr Goulding said he is worried that with the liability being transferred small businesses, still offering customers signature payment, will feel vulnerable to being targeted by fraudsters.

Retailers are going to be faced with having no option but to accept signature payment - and risk being stung with the fraud - or lose the sale altogether,í he said. With the January sales kicking off the banks could not have picked a worse time to force this scheme through. The situation is utter chaos and the blame lies entirely with the banks and their abject failure to adequately plan and prepare for this enormous transition. FPB members have been contacting us complaining that they are still waiting for their Chip and PIN machines and it is estimated a quarter of business have not installed the technology*. Moreover a staggering 53.2 million Chip and PIN cards are still to issued and Barclays and HSBC have admitted that they have not sent Chip and PIN cards to one in three customers.

The banks must have known for months that there were major problems with Chip and PINís introduction. But deplorably theyíve chosen to ignore it leaving businesses to shoulder all the risk and carry the cost of the confusion