Petrol retailer Shell has taken the decision to pull the pug on its Chip & PIN payment terminals in 600 of its UK forecourts after suffering at the hands of fraudsters.

The move, which is a blow to Chip & PIN’s reputation of being a much more secure card payment method that its predecessors, comes after a skimming fraud was unearthed. UK police have arrested eight individuals relating to the theft, which totaled more than GBP1 million.

The problem became apparent when several Shell customers discovered funds missing from their accounts. According to reports, skimming machines had been attached to the Chip & PIN payment terminals at three Shell petrol stations. The thieves had used the machine to clone Shell customers’ payment cards, which they subsequently used to withdraw cash.

In response to the breach of security Shell has stopped using Chip & PIN terminals in 600 of its UK garages. Police suspect that criminals posing as engineers tampered with the units at the affected petrol stations or that a number of Shell employees were involved.

Sandra Quinn, of the Association of Payment Clearing Services (APACS), admitted that the state-of-the-art Chip & PIN terminals should have shut down when tampered with and the fact that they did not was a failure of the terminals in question. However, she contested that the development was not a failure of the wider system.

Other major petrol retailers, including BP, are believed to be reviewing their payment technology.