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*Disclaimer: This article is accurate as of the publish date May 6, 2013
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Thinking about traveling this summer? Beware of credit card skimming. Card skimming is the electronic act of stealing someone’s credit card information with an electronic reading device, similar to phishing, and using the card to make “legitimate” purchases. Skimming is increasingly on the rise and all over the news, just ask Google. You will see stories about skimming not only all over the United States, but also New Zealand, England, Australia, Canada, Russia, and Germany, to name a few. Earlier methods of skimming began by copying receipts and have since become a more sophisticated practice. Read on to understand more about skimming.
How Credit Card Skimming Works
It all starts with some form of machine/device; a credit card skimmer, video recorder used at ATM’s, a smart phone app, etc. That machine will pick up your credit card information which is then saved and can be loaded onto your personal computer or laptop. They then use equipment for encoding and use the card numbers to load onto empty gift cards or to make on-line purchases. Here are a few scenarios:
- Skimmers at ATM’s: A card reader device is placed over the original card slot that reads the magnetic strip, which is usually used in tandem with a mini video recorder that displays the user entering in their PIN number.
- Keypad Overlay: This method is used by placing a keypad that directly matches the buttons over the original keypad. It records which numbers are pressed and wirelessly transmits the PIN.
- Portable Skimmers: These devices are often used by those working in restaurants or store shops where they re-swipe the card either before or after it’s swiped on the legitimate card reading device. Some thieves will work out a deal with these employees by giving them a payout per stolen card.
- Smart Phone Apps: Smartphone apps have been developed to “read” the tap-and-go computer chip on credit cards, without the credit card needing to be in sight. The credit card number, expiration date and card holders name can be read through your pocket within seconds.
Red Flags to Watch For
Card skimming is not fool-proof and there are ways to identify skimmers in action or even spot the actual device. Here’s what to watch for:
- An employee at a store swipes your card through a different machine than the one you just used
- An employee or shop assistant takes your card out of your sight to process the transaction
- You are asked to swipe your card on more than one machine
- The ATM seems to have a rigged, or attached device on it for swiping your credit card
- You find unusual or unauthorized transactions on your account
Who Are Credit Card Skimmers?
Credit card skimmers can be anyone; your neighbor, your waitress from last weekend, immigrants, gas station clerks, and those who are in desperate financial situations. The most common places credit card skimming occurs are at locations where your credit card can be taken away from your eye sight like restaurants, fast-food stops, bars, call centers, and retails and boutiques.
What’s Being Done About It?
There currently are no laws that directly address intercepted transfers of credit card information. There’s not much protection for those who have their information stolen but talks are in the works. Google has recently commented about making sure no apps are available that violate their terms and a new proposed law could soon be enacted. A Columbus, OH lawmaker proposed to legislation the prohibited use of telecommunications devices that can intercept information related to fund transfers. There will likely be developments in the near future.
When it comes down to it, be observant of your surroundings and trust your gut. Never share your PIN numbers or passwords with anyone and make sure those passwords are hard to crack. If you were a victim to skimming, call the cops, notify your bank, and contact the 3 credit bureaus and place a freeze on your credit pull.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.