Nationwide have apologised for the error, and have, quite rightly, said that if anyone goes overdrawn as a result, they will not be charged. Yet some people still aren’t happy, and have complained that it’s too much money to take from their accounts at once. Yet if they don’t have the money still in their accounts, it’s money they’ve spent twice over, which rightly belongs to the bank.

Why didn’t people notice that the money hadn’t been taken from their accounts? If people are in real hardship because Nationwide are claiming their money, the amount in question must be a significant sum to them. So why weren’t they suspicious when they suddenly had that extra money to spend? If on the other hand, the cash withdrawn is only a small amount to a particular customer so that they didn’t notice, it’s also too small an amount to make a fuss over when it has to be repaid.

This had been going on for more than three months, yet it seems none of the customers affected reported it to Nationwide for a long time. Surely they will all have received at least two monthly statements during that time, so should have noticed the discrepancy? Some of them must have been hoping the bank wouldn’t find out, and they’d get to keep the extra money. As for the rest, they probably don’t even look at their statements. People should really get into the habit of checking their bank statements – after all, next time around, it could be that the bank has debited the withdrawals twice. It’s in the customer’s interest to check that all the transactions are correct.

A brief background to chip and pin: originally, all credit and debit cards carried information on a magnetic strip, and to make a payment, the cardholder had to sign the till receipt, which the cashier was then meant to check against the signature on the back of the card. Chip and pin is supposed to increase security two fold: information is stored in a microchip on the front of the card, which is harder to duplicate; and the cardholder must enter his or her four-digit personal identification number (PIN) to authorise the transaction, instead of signing.

When the system was introduced, I realised that the new system was only as secure as the PIN. If someone discovers the PIN, for example by watching the cardholder at the supermarket checkout, they can then use the card if they manage to steal it, and don’t even need to be good at forging signatures.

This latest fraud seemingly involves keypads in the petrol stations that have been tampered with so that they record the details of the magnetic strip – a form of fraud that has been around for a long time. The difference is that now the fraudsters are also able to record the PIN as it is entered. The information from the magnetic strip is used to make a clone card, which is then used to withdraw money from cash machines. Apparently, cash machines still read the strip instead of the chip as they haven’t been upgraded yet – presumably to reduce the banks’ costs. As the PIN used at the cash machine is the same as the one used for chip and pin, there is no barrier to withdrawing cash up to the cardholder’s limit.

Hopefully, the cash machines will eventually be replaced. But by then, maybe the criminals will have figured out how to read and reproduce the microchips. In the meantime, all the hapless cardholder can do is to be sure to shield the keypad when entering the PIN, and to check account balances and statements regularly. Alternatively, we could all go back to cash.