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Credit Card Skimming 101: How to spot it, prevent it, deal with it

January 16, 2012

Victims of credit card skimming are completely blindsided by the theft. They notice fraudulent charges on their accounts, but their credit and debit cards never left their possession. How did the theft occur?

The Edmonton Journal reported on Friday, January 13, 2012:

Skimming operation stole $500,000 off cards

Investigators say chip technology used in a vast card-skimming operation in the city is the most sophisticated they have ever seen, with each machine capable of collecting millions of dollars.

Police confiscated 10 machines designed to collect up to 3,000 card numbers each.

A total of $500,000 was withdrawn from 900 accounts in Edmonton, but thousands of other account numbers collected have not yet been used.

This is one of the largest debit and credit card-skimming operations the economic crimes unit has ever seen.

Numerous banks were affected in this card-skimming operation. The group targeted businesses that use debit-and credit-card machines, and the information from every card run through an altered machine was captured.


How to spot Credit Card Skimming

In credit card skimming schemes, thieves use a device to steal credit card information while you are making a legitimate transaction. It is typically an “inside job” by a dishonest employee of a legitimate merchant. The thief uses a small electronic device, called a skimmer, to swipe and store hundreds of credit card numbers from the magnetic strip. The employee usually sells the information through a contact or on the Internet, at which point counterfeit cards are made. The criminals go on a shopping spree with a copy of the credit or debit card, and credit cardholders are unaware of the fraud until the statement arrives with purchases they did not make.

Skimming occurs most frequently at retail outlets that process credit card payments, particular bars, restaurants and gas station. The skimming devices are also often placed on ATMs or even held in the hands of waiters.

Many consumers think that shopping online is a high-risk endeavor compared to going to an actual store. With the increase in the sophistication of credit card skimming, you might want to think otherwise. Most cases of identity theft through credit card skimming involve employees at a physical store stealing your information.

How to prevent Credit Card Skimming

Make sure your credit card stays in sight and never let anyone leave with your card. Skimming often occurs at restaurants where your server walks away with your card. If the restaurant does not have a pay at the table transaction device, you might want to pay cash instead.

Your credit card is like cash. You need to be aware that your credit card is very valuable. Would you give someone cash and let them walk away with it?

Monitor credit card receipts and check them carefully  against your statements. Sit down with your spouse or partner to account for all charges. Some thieves take out small amounts in hopes cardholders won’t notice.

Shred unwanted financial solicitations. Put your mail on hold when you leave town.

How to deal with Credit Card Skimming

  • Call 911. When your credit card is stolen, it is no different from having your car stolen. File a police report and hang onto the police report number.
  • Contact your bank and creditor immediately and let them know about the loss. Call first, then follow up in writing. Your maximum liability is $50. If only your credit card information has been stolen, you won’t be liable for any fraudulent charges.
  • Place a fraud alert on your credit report. Contact the tree major credit bureaus: Equifax (800-465-7166), TransUnion (866-525-0262) and Experian. Place a fraud alert on your credit report. This forces businesses to confirm your identity before approving applications for any credit.

Request a free credit report from each of the three major credit bureaus mentioned above. You are entitled to one free report per year. Look for companies that checked your credit. For example, if a car dealership looked at your report, but you never went there, someone else with your card information went car shopping without you. Contact the police immediately.

You really should educate yourself on credit card skimming and learn how to avoid it.

Once again, some good common sense will go a long way when using your debit and/or credit card.

If you don’t have a security system or don’t have it monitored, call me for a free, no-obligation consultation.  You will be glad you did!


Ulli Robson, Security Specialist, (780) 288-2986

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