For the first time, fraud investigators have discovered chip-and-pin card readers in the possession of criminals, signalling the next level in sophistication of attacks on payments systems banks have been maintaining as safe.

In the biggest raid so far, the Cheque and Plastic Crime Unit found the terminals in a Birmingham factory set up to make cards on a ‘massive’ scale, the Financial Times reports.

Two people have been charged with conspiracy to defraud in arrests described by Detective Chief Inspector John Folan as a ‘significant development’ in the unit’s work to reduce card fraud.

Apparently, by examining the terminals in their possession, fraudsters were able to develop tracking devices that could be placed on retailers’ readers to yield the card details of individual customers.

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Read the Financial Times story