Fraud Alert: Credit card skimming

Online fraud, including phishing and hacking related crimes, may get a large share of the media's attention but, in reality, less high-tech methods are actually responsible for most identity theft crimes. According to a recent BBB/Javelin report, 90% of identity theft crimes start with data theft through offline channels.

One of the ways that a thief can obtain your data offline is through the use of a "skimming" device. These small magnetic stripe readers can be easily purchased online for $300-$800 (it once took me less than half hour to order a skimmer and a keystroke catcher online for an identity theft presentation).

In the legitimate business world, these devices are used to swipe membership cars at gyms or take credit card orders away from the office. Technology has advanced so that these credit card readers can now be as small as a disposable lighter. They can also be hooked up directly to a Blackberry in order to email the credit card data instantly.

Most commonly, skimmers are used by waiters or retailers who have a convenient second to swipe your card when you hand it over. The can also be placed over an ATM or a gas station pump reader to capture card information.

Once the skimming device is full, the thief downloads the stolen credit card information on to their computer and makes purchases using the data. In some cases, the skimmer data is sold to identity theft rings that actually produce and sell fake credit cards with your information. These credit card counterfeit rings could be located anywhere in the world. According to a Bankrate.com article:

"A Far East factory will do as many as 5,000 cards a night, and the next day those cards are in a suitcase on the way to Europe," says George Wallner, chairman and chief strategist at Hypercom Inc., a leading provider of point-of-sale card payment terminals.

Skimming can be a difficult crime to prevent since you often have no idea that your credit card data has been stolen until suspicious charges start to appear. It is also very hard to track down exactly where and when your credit card data was stolen since most people hand over their credit cards at stores and restaurants several times a week. By being aware of what skimming devices look like and how they are used you can prevent this type of identity theft crime from happening to you.   

Comments

[Anthony Carlisle]

It just happened to me. I was taken for $2000. I would love to catch these guys cause I am pissed off. I work hard for my money.