According to a 2009 study, American consumers lose more that 4.9 billion dollars annually to credit card fraud. These loses, while staggering, don’t compare to the 190 billion that merchants and banks lose to credit card fraud. However, those costs are eventually passed to consumers therefore, the consumer bears this expense as well.
Among the several different schemes in credit card fraud, one of the most popular is skimming. The term refers to the data of the credit card that is taken, and not necessarily the card itself. This allows the thief to use the credit card’s data to illegally make purchases while the victim is unaware of the purchase being made. For those hard line items that require a delivery, the thief uses an address of a vacant house listed for sale, or a nearby residence where they can set up a lookout for the delivery.
Skimming can happen in a number of ways. Creative thieves have used peripheral devices to capture the victim’s card data. These include Bluetooth interceptors for wireless payment systems, and fake card readers that record a credit card magnetic strip data, and hidden cameras to record the victim’s Personal Identification Number input. Typically, these types of schemes do not involve the vendor where the theft occurred and normally used where an unmanned credit card acceptance is common. ATM’s and fuel pumps are the most vulnerable. With the stolen credit card data, the thief normally does not use the card data for several days or weeks, often selling the stolen card data to other thieves online.
For POS fuel pumps, be weary of any device that looks out of place for the credit card to be inserted. Skimming devices mimic the actual credit card acceptance but beware of any device that is not integrated with the design of the pump. Also, watch for any loose components to the credit card slot or pin pad, which may indicate the adhesive to the thief’s device is loose. Many times the devices must be removed by the thief for the stolen data to be retrieved. This also means the thief is nearby and monitoring the moment to move in. If you see a situation similar to this, simply advise the clerk on duty and request for them to investigate.
Another method of skimming is for the person at the Point of Sale to manually record or electronically skim the credit card data. Most card payment systems today use technology that hides much of the Track 1 and Track 2 data from the vendor. This data is contained in the magnetic stripe and includes the account number, the expiration data, and the cardholder’s name. It will also indicate if the card is a credit card or a credit/debit card. The only piece of information missing is the Card Verification Value (CVV), the three or four digit code on the reverse of the card for anti fraud proposes.
In the skimming method involving a person at the POS, watch if your credit card is requested by the clerk and leaves your line of sight. Most POS systems today use countertop card swipe machines, or card swipes on the computer based payment system. Beware of businesses where the customer cannot see the card being swiped. The dishonest clerk may have a skimming device to swipe under the counter, thereby stealing the data needed to commit the fraud. The clerk will need to record your credit card number, the expiration, and the name of the cardholder. This could also be done under a security camera they may access later.
As with any payment method, the possibility exits for a potential fraud to occur, given the creativeness and ingenuity of the thief. The best defense to preventing fraud is to maintain vigilance on the credit card’s activity and promptly notify the credit card company if fraud is suspected.