Credit card skimming is a major threat to credit and debit card users. Here's what you need to know about this increasingly common form of financial fraud.
Credit card fraud is a common problem these days. If it hasn't happened to you, we guarantee you know someone who has been a victim.
Usually, you're never aware its happening until your card gets declined when you should have an account full of money, or your bank calls to check that it's definitely you racking up some serious purchases on your card.
Skimming, a form of high-tech financial fraud, is on the rise worldwide. It relies on sophisticated data-reading electronics to copy the magnetic stripe information from your credit card or debit card. It can capture both your credit card number and your PIN. And it's happening not just at restaurants and bars, but petrol pumps and ATM machines.
Credit card fraud: High-tech theft
Today a criminal merely has to slip an electronic magnetic strip reader over the existing card slot at an ATM, or replace a card reader at the tills in a shop. When you slide your plastic in, the skimming device reads it first, and then the actual card reader does - at which point the transaction proceeds as expected. But now a crook has an exact copy of your card data without your even realising it.
Older card-skimming devices required criminals to return and collect the information periodically, exposing them to risk of discovery. But newer skimmers can broadcast the card data to the thieves either by Bluetooth (which has a short range) or by GSM cellular. This enables the thieves, who may be sitting in a car nearby or in a building on the other side of the planet, to capture the account numbers live as the account holder makes a purchase or a withdrawal.
Credit card fraud: Pay at the pump
Petrol stations may be the most vulnerable locations, especially since more and more are offering automated (an unmanned) pay at the pump services, giving criminals plenty of opportunity to embed skimming devices in them late at night. In the US, skimming attacks became so prevalent in Arizona in 2009 that the governor ordered police forces to inspect petrol stations along major roads.
Credit card fraud: ATMs problematic, too
ATMs are vulnerable for the same reasons that petrol pumps are: They're exposed and unattended. Criminal organisations have targeted ATMs throughout Europe. In a presentation at Black Hat USA 2008, security researchers Nitesh Dhanjani_and Billy Rios showed pictures of a warehouse full of ATM card readers and keyboards, in moulded plastic of every colour to match any ATM on the market today.
Responding to the threat, South Africa's Absa bank experimented with adding pepper spray anti-tampering systems at 11 of its most commonly skimmed ATMs; unfortunately, maintenance crews attempting to service the machines have sometimes triggered the spray.
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