Protect Against Credit Card Skimming

Hello there! If you are new here, you might want to subscribe to the RSS feed for updates on this topic.

If you have ever had your credit card number copied and used without your knowledge, you were a victim of credit card skimming. By definition, credit card skimming is the theft of credit card information used in a otherwise legitimate transaction. More often than not, this type of theft is typically perpetrated by a dishonest employee working for an honest merchant.

The tools used to carry out this type of theft can be as simple as a pen and paper or as technological as a magnetic stripe reader. Anyone from a store clerk to members of organized crime will have access to at least one method of copying your credit card information, to include the security code found on the back of the card. Although you may not be aware that this theft is happening, literally right under your nose, steps can be taken to reduce the impact if you are victimized.

Credit card skimming can occur anywhere you use your credit card. However, according to recent research, the most likely place to have your credit card skimmed is at a restaurant. At most retailers, your credit never leaves your site. Not so at a restaurant. Once the waiter takes your card and it’s out of your site, he or she has ample opportunity to record all the information needed to use your card without your authorization or knowledge. Other prime locations for skimming are kiosks, vending machines, self-checkout registers, gas pumps and other similar locations that allow you to swipe your credit card to complete a sale. Generally, credit card skimming at these locations involve a much more organized approach. Without the knowledge of store personnel or attendants, someone will slide a magnetic strip reader over the actual reader, which will typically protrude either above or below the actual reader. When you slide your card, one reader captures your information to be used in a crime, while the other reader captures your information for a legitimate purchase. After days of transactions are recorded, the secondary reader will be removed and processed.

What can you do to protect yourself against credit card skimming?

Always review your statement carefully and report discrepancies immediately. If available, use the internet to check your statement on a weekly basis, instead of once a month.
Keep an eye on your credit card. If you must give it to a waiter, watch the waiter the entire time he has your card.
Make sure the waiter isn’t carrying anything that may resemble an electronic device, which may be a reader.
Sign up for fraud alerts with your credit card company.
Ask questions if you see your card is swiped more than once. It’s not unusual to see this occur, but be sure to inquire as to the reason why. It’s ok to be suspicious.
Instead of using your credit card, use a check or cash.
Take a few extra seconds to examine a card reader on a self-checkout machine. Compare the reader with those on other machines to see if it looks any different. If so, don’t use that particular machine. Always error on the side of caution.
Look for extra devices around the cash register. If you see any additional electronic device, make sure your card is not swiped through more than one machine.

Maybe someday credit card companies will require a picture of the cardholder on all credit cards and a pin number that we select. Only the cardholder pictured on the card will be authorized to use the card and, at locations where cards are swiped, a personal pin number must be entered. Although criminals would find a way to circumvent these security measures too, at least it would be a little more difficult. I think we can all agree that, when anyone can use any credit card to purchase anything they want within the card’s spending limits, fraud will always be present.

Special thanks to Catherine Penizotto and her article “Credit Card Skimming A Crime Against the Brand”, found in the January – February 2009 edition of Loss Prevention.