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Phantom cash card trial concludes

A one-day trial that raises questions about the security of cash cards concluded yesterday, with a decision expected in about a month.

The Halifax Bank was sued by Alain Job in March 2007 over eight withdrawals made from his account in February 2006. Job maintains he did not withdraw a total of £2,100, and also that he did not authorize anyone else to withdraw the money.

Job decided to sue after the Financial Ombudsman Service sided with the Halifax.

Job believes one possibility is that his card was cloned. Halifax maintains that it was his card that was used to perform the withdrawals and that either Jobs is knowingly trying to defraud the banks or was grossly negligent in handling his card and PIN number.

Job is represented pro bono by Stephen Mason, an attorney who specializes in the collection of digital evidence and has written about case law involving disputed cash-machine transactions.

Experts who have studied suspect cash-machine withdrawals say there are proven ways that criminals can dupe machines into accepting bogus cards.

In the U.K. and Europe, banks issue chip-and-PIN cards. They are cards with an embedded microchip that's used to authenticate transactions and people must enter there four-digit PIN when using. These replaced signature cards.

The liability rules are different for phantom withdrawal cases in the U.K. than in the U.S., where banks must directly prove fraud in order to reject a claim. In the U.K., that responsibility is on the customer, and banks tend to steadfastly maintain there are no security issues with their systems.

If the judge finds in favor of Job, it could lead to a change where U.K. banks would have to provide a higher level of evidence for phantom withdrawals in order to push the liability to the customer.

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