As more criminals wake up to the advantages of cybercrime over old-fashioned bank robberies and brick-and-mortar burglaries, credit and debit card skimming is becoming increasingly common.
In particular, reports of ATM and gas station skimming are on the rise, according to BankInfoSecurity.com, and incidents are increasingly being perpetrated by organized crime rings. Most recently, 300 members of State Employees Credit Union in Raleigh, NC had money withdrawn from their accounts after their card information had been lifted by a hidden skimming device.
In another instance, a member of the Russian mob, worked for months at a gas station in California, during which time he installed skimming device, reports LA Weekly. The man then vanished, and so did money in thousands of bank accounts in Southern California. According to police estimates, the fraudster made off with more than $300,000 by using the stolen credit and debit card information.
Skimmers are easy and cheap to get; they sell for as little as $20 on eBay. Risks are much lower than when robbing a bank, and rewards potentially as lucrative. Fraudsters leave behind little physical evidence, so thieves are often difficult to trace. In short, for fraudsters, credit and debit card skimming is as near to a perfect crime as they come, and with law enforcers armed left with few options for tracking thieves, expect skimming to continue to escalate.
How exactly does skimming work? It’s a simple little three-step process:
- Fraudsters attach an electronic device to a gas pump or an ATM machine. On ATMs, skimmers are often concealed in a bulky plastic piece attached to the ATM, carefully disguised to look as if it’s part of the ATM. On gas stations, the device is smaller and harder to detect.
- When victims swipe their credit or debit card to pay for gas or get cash from the ATM, the skimmer records the information stored on the magnetic strip of the card, and transmits it electronically to fraudsters. In addition, a hidden camera may record the card PIN number as the cardholder types it in.
- Fraudsters use the stolen debit or credit card information to either clone a new credit card or electronically transfer money from the victim’s bank account or credit card. Cardholders don’t have a clue that they have been defrauded, until of course, the credit card or debit card statement with the fraudulent charges arrives in the mail.
ATM machines and gas stations are not the only ones affected. Other popular targets for skimmers are restaurants and even retail stores, where the skimmers typically are attached by employees, without the owner’s knowledge.
Consumers are covered against fraudulent charges to their credit and debit cards, but restrictions apply. To protect yourself, follow these simple precautions:
- Use only ATMs that you are familiar with. Familiarize yourself with how the ATM looks, so you can detect irregularities, such as a strange-looking attachment to the ATM, which could hide a skimmer.
- At gas stations, never use pumps that are hidden from the attendant’s view, which are more likely to be targets for skimmers.
- If something doesn’t look right, go to another gas pump or ATM. Never use a card reader that appears to fit poorly.
- At gas stations, if possible pay with a credit card, which offers greater protection against fraudulent charges. If you use a debit card, choose the “credit” button instead of the “debit” button, so you don’t have to give out your PIN number.
- Whenever you type in your PIN number, make a habit of concealing your fingers in order to make it difficult for a hidden camera to capture your PIN number.
- Check your credit card and debit card accounts frequently for unauthorized charges, and contact your card issuer or bank immediately if you see any irregularities, even very small charges.
Credit card companies will cover fraudulent charges to your credit card if they are reported in a timely manner, typically within 60 days. But there are exceptions; most notably many credit card companies do not extend zero liability to ATM withdrawals, which involves knowledge of your PIN number.
The fraud protection on debit cards is even more limited; if you report within two days of discovering unauthorized charges (i.e. two days after receiving your statement), your maximum liability is $50. After two days, you could be held liable as much as $500. If you wait more than 60 days before reporting fraudulent debit card charges, you will no longer be covered at all.
