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What is… Card Skimming?

posted by: FraudWatch International date: Sep 21, 2016 category: All, Expert Explanations comments: 0

What is it?

Card Skimming is the act of using a portable device to illegally collect data from the magnetic strip of a credit, debit or ATM card.

Victims of credit card skimming are often unaware of the theft until they notice fraudulent charges on their accounts or discover that money has been withdrawn. Their credit card or debit card has never been stolen, so how did the theft occur?

Our experts explain

To skim a credit or debit card, a criminal will set up a skimming device at a location where people regularly use their cards, for instance an ATM (Automated Teller Machine). The criminal will manufacture a card slot reader that looks very similar to the one on the ATM, and install it over the top of the legitimate card slot. Each time a customer inserts their credit or debit card, they are actually passing it through the skimming device first, which reads the magnetic strip and steals the information on it.

83_card-skimming_1Figure 1: A Skimming device being fitted to an ATM (source: Krebs on Security)

Often, there will also be a miniature camera installed inconspicuously on the ATM, which can capture the PIN as the customer enters it on the keypad. Another technique used, is a keypad overlay which lines up with the buttons of the legitimate keypad and records the keystrokes of the customer’s PIN as it is entered.

83_card-skimming_2Figure 2: A fake keypad that was used to capture PINs (source: Krebs on Security)

Most skimmed data is transmitted overseas, where the information is copied onto counterfeit cards embossed with foreign bank logos. It is very easy for these cards to make their way back into circulation in different countries, as there are very few restrictions on importing card blanks, embossing machines and skimmers. The skimmed data can also easily be used for “Card-not-present” fraud, where a criminal uses the card details to make over-the-phone or Internet purchases.

Besides wanting your card details to make fraudulent purchases, skimming is also done to commit identity theft. This is where the thief uses your stolen personal details to create accounts or take out loans.

Sometimes, a Front of House retail or restaurant worker is recruited to be part of a skimming ring. These workers use a handheld device to skim your credit card during a normal transaction. We happily hand our cards over to waiters to pay the bill at a restaurant. The waiter walks away with our card and has the perfect opportunity to swipe the credit card through a skimmer without being detected.

Protecting Yourself from Card Skimming

It is not easy to detect if your card has been skimmed, but here are a few tips that will help you stay one step ahead of the criminals:

  • Regularly monitor your debit and credit card accounts (at least weekly) and report any suspicious activity to the bank immediately.
  • If the ATM you are using looks abnormal or appears to have an extra device attached, do not use the machine and report it to the bank and Crime Stoppers on 1800 333 000.
  • Restaurants, bars, and petrol stations are popular locations for card skimming, so be vigilant. If a staff member disappears with your card, or asks you to swipe your card through more than one machine, be suspicious.
  • Know what card skimmers look like. They are becoming smaller and smaller and harder to detect. When using an ATM, cover your hand as you enter your PIN to block any camera from recording what you’re typing. Also, if the buttons seem hard to push, eject your card and use another ATM.

 

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