Abbey National's online banking arm, Cahoot, is launching an Internet-based 'disposable' credit card, dubbed webcard, to reduce online fraud for online.
The idea is simple: people with Cahoot debit or credit cards enter their details into the bank's website and it generates a unique 16-digit ID number each time they wish to make an online purchase. As soon as the transaction is concluded, the number is rendered invalid, meaning your actual card details are never given out. (Refunds will work like normal though, as they are linked to that specific transaction.)
Users are also able to specify a maximum value for a transaction, thereby preventing your account being overcharged for whatever reason. The best bit is that users are able to use the service to shop with any retailer, rather than just partners signed up with Cahoot. It can even be used to purchase goods over the phone, unless of course the seller requires a credit card impression or swipe on delivery or collection.
The technology was developed by Orbiscom, which it flogs to companies around the world. Cahoot is its first UK-based customer.
A year ago, Securicor announced a service that would allow shoppers to buy online without passing on their card details, but it's a lot less flexible than webcard as customers are limited to shopping with retailers signed up on Securicor's online mall.
The danger is real; online retailers don't have many means to check card details and they are often caught out exposing their existing customers details on an unsecured website, such as Amazon subsidiary Bibliofind. Cahoot estimates that about 250,000 people have been victims of online fraud.
Last week, a gang of five were jailed for conspiring to defraud online banks by making multiple bogus credit card applications. The gang targeted Cahoot, along with five other banks, in its scheme. ®
Online bank fraudsters jailed for eight years
Securicor's fraud prevention scheme
Compaq site exposes customer details
And so does official-merchandise.co.uk
American Express offers temporary CC numbers for the Web
Sponsored: Webcast: Ransomware has gone nuclear