Apparently, Chip and Pin is not so secure as its cracked up to be. Now, I never thought it was up to much anyway, but allowing transactions through even though the Chip cannot be read is ludicrous.
The banks claim this is to avoid upsetting customers whose card may simply be damaged. But remember this, if you lose money through an ATM through, say a cloned card (no Chip) the bank will lay the blame at your door as a Pin was used. There are numerous ways of getting your hands on a Pin but without the corresponding Chip it should be useless. 🙁