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Skimming Big Business targeting Big Business

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Skimming means more than just cutting fat off steak; it’s also when a thief obtains data from that magnetic strip on the back of your credit card (or debit or ATM card).

2CThe thief records and copies this data with a counterfeit card reader onto a blank card’s strip, and then makes purchases or cash withdrawals with this fraudulent card—in the account holder’s name.

Skimming takes place at ATMs, taxis, gas stations, restaurants, retail stores—any place where an employee will swipe your card to make your purchase. A credit/debit/ATM card reader can be fitted with a skimmer by the thief. Or, the thief can skim your card using a handheld skimming device.

Next time you hand your card to a clerk, watch it very carefully. At one gas station, two attendants skimmed dozens of customers’ cards with a square-shaped device the size of a dime, then sold the stolen information.

There are several ways to skim this cat:

  • An employee skims a card, then sells the stolen data, usually online on illegal “carding sites.”
  • The skimming or scanning device can be tiny, hidden in the hand.
  • Other skimming devices are superimposed on an ATM’s “mouth” to collect information when customers insert their cards. Thieves can then transfer the data via Bluetooth.
  • Sometimes a scanning-overlay is placed on the keyboard to capture PINs.
  • A less sophisticated approach is to record via tiny camera the customer entering the PIN.
  • Thieves with only half a brain know to wear concealing attire when they collect these devices. They do it quickly since they know that banks can catch on quickly.
  • These devices are also placed inside gas station pumps.
  • Some of these crimes are perpetrated by organized groups, and the gas station ones usually come from Europe.

Make It harder for Thieves

Always use the same ATMs so that you might detect a subtle difference one day.

Use indoor ATMs.

Keep your eyes on your card after giving it to an employee, though this isn’t always possible when the employee disappears into an employee-only area.

Cover the PIN pad with your other hand when entering your PIN.

Finally, routinely check your credit card and bank statements for any unauthorized charges.

Robert Siciliano is an Identity Theft Expert to AllClearID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen See him knock’em dead in this identity theft prevention video. Disclosures.

“Flash Attacks” Make Big Money for Debit and Credit Card Scammers

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The latest ATM scam is so brilliantly simple, it’s hard to believe that it actually works. Apparently, banks’ fraud detection systems are unable to flag nearly simultaneous transactions from the same account. This leaves bank customers vulnerable to what’s been termed a “flash attack,” in which multiple scanners use a stolen debit card number to withdraw cash from the same account.

Once a victim’s debit card number has been successfully skimmed, the card can be cloned, say, 100 times, and the cloned cards can be distributed to 100 people. All 100 people can then use the cloned cards to withdraw cash from 100 different ATMs within a brief window of five or ten minutes. If 100 people withdraw $200 each from the same account, at the same time, the scam nets $20,000 in almost no time.

Your credit or debit card number can be skimmed in a number of different ways:

Wedge Skimming: The most common type of skimming occurs when a salesperson or waiter takes your credit or debit card and runs it through a card reader, which copies the information contained in the card’s magnetic stripe. Once the thief has obtained the credit or debit card data, he can then burn the card number to a blank card, or simply use the number to make purchases online or over the phone.

POS Swaps: Many people pay for goods or services by swiping a credit or debit card through the in-store point of sale machines. EFTPOS (electronic funds transfers at the point of sale) skimming occurs when the point of sale terminal has been replaced with a skimming device. In Australia, fast food chains, convenience stores, and specialty clothing stores have been common targets. McDonald’s, for example, has been hit with this scam.

ATM Skimmers: A card reader device can also be placed on the face of an ATM, disguised as part of the machine. It’s almost impossible for the average user to recognize a skimmer unless it is of poor quality, or the user has an eye for security. Often, the thieves will hide a small pinhole camera in a brochure holder, light bar, mirror or car stereo looking speaker on the face of the ATM in order to extract the victim’s pin number. The device may use wireless Bluetooth or cellular technology built to obtain the data remotely. Gas pumps are equally vulnerable to this type of scam.

Data Interceptors: Rather than simply placing a skimmer on the face of a gas pump, some criminals place a data-stealing device inside the pump. Posing as a fuel pump technician, a criminal can use a universal key purchased on eBay to access the terminal. Once inside, they unplug a cable that connects the keypad to the display, and piggyback their own device within the mechanism, in order to capture all the unencrypted card data.

Dummy ATMs: ATMs can easily be purchased through eBay or other outlets, and installed in any heavily trafficked location. The machine, which might be powered by car batteries or plugged into the nearest outlet, is programmed to read and record card data. I found one advertised on Craigslist and picked it up at a nearby bar, for $750 from a guy named Bob.

Once credit card numbers have been skimmed, hackers can copy the data on to blank cards, hotel keys, or “white cards,” which are effective at self-checkouts, or in situations where the thief knows the salesperson and is able to “sweetheart” the transaction. A white card can also be pressed with foils, giving it the appearance of a legitimate credit card.

Federal laws limit cardholder liability to $50 in the case of credit card fraud, as long as the cardholder disputes the charge within 60 days. In order for the $50 limit to apply to debit cards, fraud victims must notify the bank within two days of discovering the fraudulent transactions. After two days, the maximum liability jumps to $500.

When using an ATM, gas pump, or point of sale terminal, always cover your PIN.

As inconvenient as this may seem, regular debit card users should check online statements daily.

Consider limiting your debit card use. I use mine only two or three times a month, for deposits and withdrawals.

Robert Siciliano, personal security expert contributor to Just Ask Gemalto, discusses credit and debit card fraud on CNBC. (Disclosures)

More ATM Skimmers Being Used By Gangs

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A report issued by the FTC finds that customers in the process of withdrawing cash from ATMs are more likely to be victims of ATM fraud than a direct, physical crime, and skimmer devices have recently been found on gas pumps and ATMs throughout Northern California.

ATM skimming occurs when a device is placed on the face of an ATM, often over the slot where the card is inserted. The skimmer, which may use Bluetooth or cellular technology to transmit the data to criminals wirelessly, appears to be a part of the machine. It’s almost impossible for ATM users to know the difference unless they have an eye for security, or the skimmer is of poor quality. Often, the thieves will hide a small pinhole camera in a brochure holder, light bar, mirror, or speaker on the face of the ATM, which is used to capture the victim’s PIN. Gas pumps are equally vulnerable to this type of scam.

Always shield the ATM keypad with your hand while entering your PIN. Be vigilant while using an ATM. Look around and beware of anyone lurking – they could be waiting to pounce, or shoulder surfing, trying to see your PIN. And if you ever sense that something is off about an ATM or gas pump, just leave.

Choose a PIN that’s not easily guessed but can be entered quickly. Using consecutive numbers or repeating the same numbers is never a good idea. Many new ATMs won’t allow you to choose a “soft” PIN anyway.

Don’t ever let anyone assist you at an ATM. It’s hard to envision what kind of scenario might require another person to intervene at an ATM. But consider this possibility: your card gets stuck and a stranger graciously peeks his head over your shoulder to help. He frees your card and helps you finish the transaction. In the process, he got your PIN and swapped your card with another.

Beware of ATM skimming and learn to recognize a skimmer. Here is an example of a particularly well-made skimming device, which would be easy to miss. Not all are as well crafted, but some are very good.

Robert Siciliano, personal security expert contributor to Just Ask Gemalto, discusses dummy ATM scams on NBC Boston. (Disclosures)