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Skimming – The Newest Way To Rip You Off

Skimming is just one more tool in the arsenal of hi-tech thieves determined to get something that isn’t theirs – your money. To protect yourself you first need to understand what it is, how it is done and how the information is used.

Skimming uses technology to capture information such as personal account numbers, drivers license, and credit card numbers. To gain access to this information a variety of methods are used, but the device that actually captures the information can be easily purchased for as little as $50.00. 

This electronic device, or ‘skimmer’, can either be attached to a legitimate device to capture the information from unsuspecting consumers, or used to surreptitiously swipe cards either before of after the legitimate transaction is completed. The information gathered can either be stored on the device itself or routed to a computer for storage and later retrieval. 

Credit cards are most often targeted for theft via skimming, but identity theft it is gaining in popularity with ID thieves and has been growing at a phenomenal rate internationally. In Asia, for example, card skimming has increased by 45%. Other high risk locations travelers need to be vigilant when making credit card purchases are Malaysia, Hong Kong, Belarus, Colombia, Egypt, and Venezuela. 

The theft actually occurs in two stages. It is alarming to note that most incidences of skimming take place at restaurants where servers are well paid for providing theft rings with the information used to steal your money, identity, or both.

It is common for a server to present you with a ticket for a meal. In response you give the server your credit card and they take it to the cash register to ring up the charge and accept payment. At least that is what you expect. Sometimes however, there is an additional step where the server swipes your card through a machine kept in their apron pocket or somewhere accessible. The going price for such information goes from $20 to $75. Store clerks have used this technique to capture credit card information as well as drivers license information from customers who are requested to provide proof of ID. 

It isn’t just wait staff you need to be wary of, but the ATM’s and payment terminals as well. Thieves, emboldened by the lucrative nature of such activity, along with the difficulty of catching and prosecuting these individuals, will actually implant a card capture device into an ATM slot to capture the information. Sometimes the machine takes the whole card and simply does not return it to the customer. 
More commonly however, the card is fed into the altered machine where the information is captured by the electronic device. Then the card is returned with no cash dispensed. The transaction at the ATM is not completed, but the confused customer simply assumes the machine is malfunctioning. The thief returns later to pick up the device and no one suspects anything more sinister than a routine malfunction of an ATM. The problem has grown so much in Great Britain that authorities estimate 1 in every 28 ATM machines have been illegally equipped with skimmers.

How Is The Stolen Information Used?
Once the scammers are in possession of critical information from your credit cards, drivers license or a passport, they can do any number of things with it. The person skimming the information is usually not the same one using the information. It is common to sell the stolen information to others who use the information in a variety of ways. The gathered information is worth from $25 to $75 depending on how it is to be used.
Of course the information is popularly used in straightforward transactions where merchandise is ordered by phone or online. This gives the thieves plenty of time to exhaust the credit limit before the fraud is discovered. It is also possible to make duplicates of the cards to facilitate theft. These duplicates can be made with some of the information slightly altered to avoid detection of their fraudulent nature. 

What If You Your Information Has Been Skimmed?
A skilled thief knows they have from 30 to 60 days to use stolen information, as it takes that long to even realize you were a victim of skimming. Once you suspect unauthorized activity on your credit cards you should get in touch with your financial institution to cancel the cards and order new ones if necessary. You will want to contact the credit bureaus and have them place an alert on your file so that any unusual activity can be monitored and your good credit protected should the thieves try to apply for credit in your name.

Being the victim of identity theft is not fun, but you can minimize the damage to your financial health by following a few of the common sense rules enumerated above.

There are steps you can take to protect yourself and most of them involve vigilance; being aware of who has your cards, observing machines for anything that looks unusual, and reporting unauthorized transactions on your account to your financial institution.

In addition, security experts recommend the following to minimize the risk of becoming a victim of skimming, or ID theft of any kind:

• Cancel credit and debit cards you no longer use. 

• Minimize the number of cards you carry around with you so that if they are stolen the thieves will not have taken every card you own. 

• Do not write down the PIN access codes to the cards. If your whole wallet is stolen the thieves will have everything they need to clean out your account. 

• Sign all of your credit cards upon receipt. It may be a good idea to write “Check ID” on the back of the card at the time you sign it. 

• Keep a low limit on your credit cards. At least the thieves won’t hit the jackpot with your card and will minimize your losses. 

• Do not leave receipts behind with the clerk at the store, gas pump, or ATM. Take all receipts with you. 
  Be vigilant. Be aware of your surroundings. Checkout the ATM machine before inserting your card to see if the reader looks like it should and has not been altered. 

• If possible, don’t let servers, clerks, attendants, etc. take the card out of your sight. 

• Retrieve the carbons from any hard copies made from the cards. 

• Check your credit report every year, and more often if you believe you have been the victim of ID theft or skimming. New laws allow you to request on free copy of your credit report each year from each of the major reporting bureaus.

Skimming Phishing Glossary - Definitions.

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