While skimming is a relatively new type of fraud, it’s trending around the country. Scammers are stealing credit card and account numbers from unsuspecting customers and could be netting crooks as much as $3 billion a year in the US, security experts say.
A skimmer is an electronic device that records the number of a credit or debit card when the card is swiped. The devices, placed on machines like an ATM or gas pump, are small and it only takes seconds to store the card’s information for later use by criminals. More sophisticated versions have a hidden camera that records a customer entering their PIN number.
In the past, most skimming took place at ATMs. Criminals recently began targeting gas station pumps, which are far easier to tamper with than ATMs – and more difficult to detect. Skimming equipment can be installed with double-sided tape and, because the skimmers are well hidden, it’s difficult for gas stations to catch them. Now retail outlets such as restaurants are stores are used for skimming in which small skimming devices can be used by restaurant servers and store cashiers.
How do skimming rings operate?
The stolen information is transmitted wirelessly to the crooks who use it for fraudulent purchases or, with debit cards, to manufacture “white cards” – blank cards onto which the account information is stored so they can be used at ATMs to get cash out of the victims’ accounts. In the retail setting, a ringleader will find a middleman to recruit a restaurant or retail worker to skim numbers from customers’ cards. Retail workers are paid for each number collected and the middlemen turn the numbers over to the ringleader. The ringleader uses a machine called an encoder to transfer each number to the magnetic strip of a gift card and the encoded cards are used to make purchases at locations. The merchandise is given to the ringleader who can use or sell the items.
What can you do about skimming?
• Use caution at ATMs and gas pumps.
• Consider withdrawing cash via a teller rather than using an ATM.
• Swipe with a credit card. They usually have better fraud protection than debit cards.
• Regularly check your bank account for errors.
• Wiggle the entry point of the ATM or gas pump card reader to see if it’s been tampered with.
• If you don’t already have online access to your accounts, sign up for Online Banking and check your accounts daily.
• Carry a modest amount of cash to use in case you feel uncomfortable or suspicious at a particular venue.