New £1.1bn scheme to cut card fraud

Britain's biggest banks and retailers are clubbing together with a £1.1 billion scheme in a bid to curb plastic card fraud.

The project is expected to halve fraud losses - which cost banks £400million last year, or more than ? 1million a day. Marks & Spencer, Tesco, Dixons and Esso petrol stations are among leading firms who have agreed to contribute £350million, with the banks footing the rest of the bill.

All 100 million debit, credit and charge cards in Britain will be replaced in the next three years with new, more sophisticated versions.

The cards will incorporate computer chips to make them more difficult to copy. Owners will also be required to pay for goods and services by tapping a PIN into a machine, rather than signing chits of paper.

This is designed to frustrate fraudsters who can forge signatures or shop and restaurant staff who can copy card details when pretending simply to check them.

Chris Pearson of banking organisation APACS said: "We are confident that the start of the programme will be remembered as the defining moment in the fight against plastic card crime."

Today's agreement marks the end of six years of wrangling between banks and store groups over how to make credit cards safer.