Crime that pays and pays: John Crossland is still being debited for Eurocheques stolen last year

LAST YEAR my wife and I were cleaned out by highly professional pickpockets while on holiday in Majorca. Our monthly bank statements are painful reminders of that experience, and we discovered some significant shortcomings in the Eurocheque system.

During a day trip, a well-dressed, middle-aged woman cannoned into my wife. We thought little of it until the evening when we discovered that our document wallet had been lifted. Our Eurocheques, air tickets and passports had gone.

We were assured by the police that the thieves could not use the Eurocheques without our Eurocheque cards, which we had carried separately. Our bank statements tell another story.

So far 11 cheques, worth pounds 1,634, have been cashed and after six months there is still no end in sight. We have had to transfer funds from a deposit account so the balance in our current account is large enough to cope with the next cheque that the thieves cash.

Our bank eventually refunds the money, but not until the cheques have been debited and then gone to its fraud office - which can take up to a month. The bank has effectively put a stop on the cheques, but insists that they are debited so that they can prove there has been a fraud.

So long as shops are eager to make a sale without checking the EC card, the flow of cheques to our account will not stop until the thieves run out. A spokesman for our bank said: 'We have to charge the customer's account to prove that something untoward is going on. It is a real problem ensuring that we don't inconvenience the customer but at the same time protect ourselves against fraud.'

Another problem is that, unlike travellers' cheques, emergency Eurocheques cannot be sent out by the issuing company.

If the worst does happen, it is vital that your bank is notified as quickly as possible because this limits liability for the loss.

Guy Wavcqez, head of security at the Brussels headquarters of Europay, which oversees Eurocheque operations, was frank about the system's shortcomings.

'It is paper-based and therefore fallible. We have arrangements with 250,000 bank branches throughout Europe, which deal with five million transactions a year. We cannot publicise any blacklist on that scale. It is up to the individual clerks in a foreign bank to check credentials and we give a reward when a fraud is spotted.'

He said that holidaymakers should use plastic credit cards with personal identification numbers. If a thief tries to use a card in a cash machine but does not know the personal number it will be confiscated, while if he tries to secure cash in person, the bank will check whether the card has been stolen with a central database.

Traveller's cheques also have their advantages. Thomas Cook, American Express and large banks undertake to replace lost traveller's cheques in 24 hours.

The only drawback is that opportunities to cash them are scarce in some places, especially former Communist states. A spokesman for Thomas Cook said: 'Russia certainly seems to be a blind spot. It can be quite difficult to use traveller's cheques, but I understand that things are changing.'

Plastic credit cards are more readily acceptable. In case of loss or theft, a customer should not be liable for more than pounds 50 run up by a fraudster before the bank is notified that a card has beenlost or stolen. There is no liability once the bank has been notified.

Card fraud is still widespread, however: NatWest cites a recent disaster where someone had forged a signature from the impression on a discarded carbon paper from an Access gold card transaction and had withdrawn pounds 8,000 by post.

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