WASHINGTON — The Federal Bureau of Investigation (FBI) recently issued a public service announcement warning that EMV cards, while offering enhanced security, can still be targeted by fraudsters. However, on October 13, the FBI revised its warning because EMV chip cards in the United States are not being issued as chip-and-PIN cards.

In its initial announcement, reported in NACS Daily, the FBI suggested that consumers using an EMV card at a POS terminal should also use a PIN instead of a signature to verify the transaction. “This fully utilizes the security features built within the EMV card,” said the bureau. McClatchyDC.com reports that the FBI “had to reverse field a bit” to clarify that non-use of PINs would not fully protect consumers against fraud.

The news source cites a 2012 Federal Reserve System study of 23.8 billion credit card transactions that found 13.5 million, or 5.68%, were fraudulent. The study also found that only 2.72% of debit, prepaid and ATM transactions, which require PINs, were fraudulent. Fraud was more pronounced among signature and prepaid transactions than among those that used PIN numbers. “The percentage of signature transactions that were fraudulent was more than seven times that of PIN transactions in 2011,” the study stated.

Brian Dodge, executive vice president of RILA, told the news source that chip-and-PIN is the best security technology available, noting that banks issuing credit cards do not issue PINs, and card networks do not require PINs because there is no incentive for them to do so.

Carolyn Balfany, a MasterCard senior vice president, told the news source that the card company allows, but does not require, consumers to choose whether to sign their EMV card or enter a PIN. “Ultimately, it’s up to the issuing bank to decide,” Balfany commented, adding, “Chip transactions protect consumers from counterfeit which is, hands down, the prevalent form of fraud in the U.S. PIN also protects against lost and stolen card fraud.”

Meanwhile, Al Pascual, director of fraud and security at Javelin Strategy and Research, told the news source that consumers could be confused by the new method of inserting an EMV card into an EMV-enabled POS instead of swiping, coupled with the extra step of entering a PIN, which could cause “friction in checkout lines.”

While analysts, card companies and banks debate whether consumers can handle entering a PIN at the checkout, one bank in Buffalo, New York, is confident consumers can remember another four-digit number. First Niagara Financial Group Inc. is issuing EMV credit and debit cards with chip-and-PIN security technology.

“This significant investment in chip-and-PIN technology affirms our commitment to improving security and peace of mind for our customers and the retailers with whom they conduct business,” said Justin Bigham, First Niagara’s head of consumer product management, in a press release. “We believe this positions First Niagara among the leaders in the banking industry when it comes to card security and fraud prevention.”