When the chips are down ...

Q My Chip & PIN machine has developed a fault and has been taking too much money from customers' bank accounts. It's fixed now but could I be liable for the losses?

A The problem you describe recently cropped up in a store in Burnley, where customers discovered they had been debited for more than the value of their purchases. A police spokesman described it as a "civil and not a criminal matter" which customers needed to take up with their banks .

APACS, the UK payments association which administers Chip & PIN, says the same rule applies in cases of card fraud. "If businesses have Chip & PIN terminals in store, they are covered from the cost of card fraud whether people enter their PIN or their signature, just so long as staff follow the on-screen prompts and carry out the routine checks to ensure cards have not already been reported lost or stolen," we are told.

"Banks will continue to be liable for the cost of card fraud committed on old-style non-Chip & PIN cards, so by accepting them no business is putting itself at risk in any way."

According to APACS, Chip & PIN has made it more difficult for fraudsters to commit card fraud in the UK, with losses at UK retailers down by 35 % since 2005 (£73.2 million during January to June 2005, compared with £47.4 million from January to June 2008). 

The latest figures also reveal that fraud on lost and stolen cards (£27.3 million) has fallen by 38 % in the past three years - and is now at its lowest level for 10 years. 

But the news for drinks retailers with online and mail order businesses is less encouraging. This type of card fraud now accounts for 54 % of all losses and

is increas ing. According to the most recent figures, £162 million of fraudulent purchases were made in a year.

Q My business has been affected

by the economic downturn and

I need to make one,

possibly two, of

my team redundant. What's the fairest way to do this and how do I stay within the law?

A You're right to be aware of the need to do things by the book, because if you don't you risk being sued for unfair dismissal.

You should give your staff as much notice as possible that redundancies are on the cards - not only is this morally right, it also allows anyone who was thinking of leaving anyway to discuss voluntary redundancy.

Nick Arron, a solicitor at Poppleston Allen, advises you to talk to employees on an individual basis.

"Affected employees should be given an opportunity to make their own alternative proposals," he says.

"These may include natural wastage, voluntary or early retirement, rearranging shifts, job shares or retraining and switching roles. The alternatives may well include arrangements

you had not considered."

You should make your final decision as quickly as you can, without considering factors such as sex, race, religion, age and so on.

ACAS points out that staff have the right to a lump-sum redundancy payment

related to their age, the length

of continuous service with the


and weekly pay up to a


The employer must also provide a written statement showing how the

payment has been calculated at or before the time it is paid.