If you've worked in retail, you may have come across a customer with 'See ID' written on the back panel of their credit card, rather than a signature.

The logic goes like this: if someone were to steal your credit card, they won't be able to use it without showing photographic ID with a name that matches the name on the card. Additionally, because the card isn't signed, the thief cannot know what your signature looks like in order to forge it (this presumes the photo ID has a signature for the merchant to compare).

But the practice is a breach of your cardholder agreement with your financial institution and the merchant's agreement with the payment system (e.g. Visa, MasterCard etc).

So why would credit card companies obstruct any practice that makes it harder for criminals to make fraudulent credit card transactions?

Firstly, your credit card isn't valid unless you've signed the back of it and as such, any transaction you make without a signature on the back panel of your card is invalid. According to the Visa website, the merchant is required to decline any transaction with an invalid card.

It turns out your signature isn't just on the card for security: it also acts to validate your contract with the credit card company and represents your acceptance of the card terms and conditions. It legally binds you to abide by the terms of use set out in your cardholder agreement.

There are other downsides to the strategy: by not signing your card, you leave open the possibility of someone stealing it and signing it themselves. If you don't have your ID with you, you won't be able to make a transaction. Having the merchant request ID slows down the transaction. The merchant isn't required to ask for your ID and many won't (I don't know about you, but I'm pretty sure the staff at Woolworths spend about a nanosecond checking your signature).

Perhaps the most concerning argument against the 'See ID' strategy is the fact that showing your drivers licence gives a potentially corrupt merchant or clerk some very important information about you: your address, date of birth and drivers licence number. If they manage to obtain your credit card data (your name, card number, expiry date etc) during the transaction (perhaps using a skimming device) they then have more than enough information to commit identity theft.

If you're concerned about security, you can always sign the card AND write 'See ID' on the back. Not every merchant will comply with your request, but it won't hurt.

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