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Police say they cottoned on to this scam following a raid that was made on an alleged bank card fraud factory in Birmingham, earlier this week.

They believe thieves have hid devices inside the card readers which unscramble codes and reveal customers' PIN numbers. They then create replica cards, which don't work in the UK, but can be used to withdraw

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money abroad.

During the recent raid in Birmingham, police managed to recover stolen chip and pin terminals, card account numbers, card readers, computer software and counterfeit magnetic stripe cards.

According to the Dedicated Chip and Plastic Crime Unit (DCPCU) - the UK's specialist police force for card fraud - credit and debit card fraud abroad rose 77 per cent last year, marking a staggering cost of £207.6 million to consumers.

Police officers reckon 30 checkouts in the UK have been affected by this new type of fraud, with petrol stations the most likely target for the ploy.

Detective Inspector John Folan, head of the DCPCU hailed the two arrests that police made in Birmingham as a "significant development".

"We are sending a very clear warning to fraudsters that these crimes will not be tolerated, and that we will continue to target them and disrupt their fraudulent activity," he said.