Hackers Tech: Credit Card Skimming

Theft is a crime that has been occurring throughout the ages. The technological advancements of recent decades make possible things that were formerly unimaginable—for all citizens of the world, including thieves.

"We live in a wired world and where anyone can get connected internationally, for good or for criminal purposes," says K. Jaishankar, former member of the United Nation Office of Drugs and Crime’s Core Group of Experts on Identity Related Crime, according to indiatimes.com.

Credit card “skimming” is becoming increasingly popular amongst fraudsters. The website commercial appeal.com reports that the American ATM Association has officially defined skimming as “the unauthorized capture of magnetic stripe information by modifying the hardware or software of a payment device, or through the use of a separate card reader.” Skimming can be done to both debit and credit cards, with equipment that can be easily obtained over the Internet.

How it works is this: once a criminal has swiped a card through a skimming device, the card information is recorded onto the device and also, in some cases, the corresponding PIN number. Those details are then transferred from the skimming device onto counterfeit cards, which can be used to run up fraudulent charges on the original cardholder’s account. Fake debit cards can also be used  to drain money out of the victim’s accounts.

Skimming has become a billion dollar industry. A senior Interpol officer claimed that cloned cards have been used to withdraw over $1 billion across the globe during the last decade, according to indiatimes.com. In places such as Malaysia, an estimated 5,000 cards are cloned on a daily basis. One news report referenced a video on YouTube that informed viewers they could make some $75,000 per week by skimming.

Skimming can occur in stores or restaurants, as well as at automated teller machines and card-activated gas pumps. In most cases, crooks outfit the card readers at ATMs and gas pumps with a device that fits over the card reader. After that, when a customer swipes her bank card,  gas card. or other type of plastic, the skimming apparatus captures the information on its magnetic strip. That information is either transmitted to the thieves in real time or stored away on the device, which the crooks will retrieve later.

On ATM machines, there is also often a hidden camera positioned to record the customer’s PIN code, during the course of a transaction, when the person punches it into the keypad on the machine. At restaurants, bars, and retail locations, a dishonest server or clerk will run a card through a small, handheld skimming device that captures and saves the card information contained in the magnetic stripe.

Crimes involving skimming have been increasingly prevalent in the news recently. In Maryland, just a few weeks ago, two men in their 20s admitted to involvement in an identity theft ring that victi

mized more than 250 people in the Washington, D.C. area, according to wbaltv.com. Having plead guilty, the two are slated for sentencing in January. Prosecutors claimed that the men recruited restaurant servers, then paid and trained them to run customer’s credit cards through a skimmer that recorded and stored

the card numbers and other details. The stolen numbers were then re-encoded onto fake cards and used to make purchases.

In September, Washington state U.S. Attorney Jenny Durkan fell victim to skimming at an ATM. In a rush on her way out of town, Durkan stopped at an ATM kiosk and encountered a broken card-activated door lock. "I thought it was unusual," she recounted, according to abajournal.com.

Despite her misgivings, she withdrew money from the ATM in the kiosk anyway. The next time she checked her account it was short $1,000. Durkan has since been urging other consumers to be careful and vigilant, admitting that she might have avoided the theft had she done so herself.

The escalating occurrences of skimming have inspired the  Comptroller of the Currency  to issue a consumer advisory regarding skimming at ATM machines and other places.

One action consumers can take to avoid becoming a victim is inspecting the ATM machine and immediate surrounding area prior to inserting or swiping a card. Things to be on the lookout for are: objects placed nearby the terminal that might be concealing something, a plastic sheath over the card slot, or

general signs that the machine may have been tampered with.

If something seems amiss with the equipment, or a stranger seems to be monitoring activity at the machine, consumers are strongly urged to walk away and report any suspicions to either a law enforcement officer or to the company that is operating the machine. When entering a PIN number during the course of an ATM transaction, consumers should stand with their bodies close to the machine and shield the keypad with their free hand while punching in the number. This is to obstruct any view a camera or person may have of the keypad. Decline offers of help from anyone wishing to give assistance with an ATM machine that appears to be disabled. Regularly check account statements for any unauthorized activity.

The Association for Convenience & Fuel Retailing released a statement back in August which addressed and outlined the ongoing problems skimming has been causing retailers. They introduced a “We Care” decal, and detailed its benefits for stores and their customers:

“The security labels are to be used on fuel dispensers near the credit/debit card transaction area.

If the label is lifted to insert a skimming device, a "void" message appears on the label, providing a visual alert to store employees so that additional action can be taken. Because the labels clearly indicate that they

Shell gas stations have been implementing the sticker, making anyone who uses their  Shell credit card  are to prevent tampering, the labels help assure customers that their data is secure, and discourage criminals targeting the store,” the statement reads, as per nacsonline.com.

to pay at them pump feel better protected against skimming. The Shell decal requests that customers alert the cashier if they see the decal has been broken. A broken or torn decal would indicate the possibility that the machine could have been tampered with.

Read the original article on Personal Finance By Jason. Copyright 2011.

Source: www.businessinsider.com

Category: Credit

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