Media statement
Embargoed to 0001hrs
Wednesday, July 19, 2006

Dunne: Kiwi credit card users in for European shock

United Future leader Peter Dunne today warned New Zealand credit card users may be in for a rude shock if they try to use their cards in the United Kingdom and France, now that 'smart' cards have been introduced there.

"I'm told that if a New Zealander attempts to use a New Zealand credit card in the UK or France, they are being challenged as our cards do not have an embedded computer chip or electronic PIN," said Mr Dunne.

New Zealand's credit cards work on an electronic verification system, which allows merchants (using a strip of magnetised material on the card holding information in a similar manner to magnetic tape or a floppy disk) to verify that the card is valid and the credit card customer has sufficient credit.

This is coupled with a signature at time of purchase to increase security.

Chip and PIN cards, also known as smart cards, contain an embedded microchip and are used in the UK and France.

This system has removed some of the security flaws found within the older electronic verification system as it is used in conjunction with a personal identification number (PIN).

"As of 14 February 2006, British shops and outlets will refuse to accept a signature in place of a PIN. This has created total confusion for New Zealand travellers as credit card users have not been warned to expect this.

"By law, all British shops, outlets and restaurants MUST accept signatures from overseas visitors where chip and PIN technology has not been rolled out.

"When asked for further information, a New Zealand bank told me that many British outlets may not be aware of this obligation and may need to be "reminded" that New Zealand has not implemented this technology yet and we are therefore unable to verify purchases through PIN's.

"I am calling for credit card providers to make this information more widely available, through websites and card information brochures.

"This information should also be on the Ministry of Foreign Affairs website and possibly at www.safetravel.govt.nz ", Mr Dunne said.

"These chip and PIN credit cards are the future of secure banking and New Zealand must embrace this technology as soon as possible.

"Meanwhile, it is essential that all New Zealanders travelling to the UK know what to do when outlets refuse to accept their signature," said Mr Dunne.

ENDS

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