Preventing credit card skimming

Scam can easily go undetected

Skimming is one of the most insidious credit card scams. It occurs when a thief, using a device that steals information from a swiped credit card, is able to produce a legitimate-looking credit card in his or her name—but with the real owner's account information.

Not long ago police in Mayfield Village apprehended a shoplifter and discovered 71 credit and debit cards in his possession. All of these cards looked legitimate. They had the name of the suspect or his accomplice imprinted on them. However, the investigation revealed that each of the cards contained stolen financial account information from victims who, for the most part, lived in the area. Investigators ascertained that the cards' information was skimmed at a restaurant in Mentor.

Skimming is accomplished through a small device, aptly called a card skimmer, that can scan and store credit or debit card data from the magnetic stripe. Thieves commonly install skimmers on ATMs and gas pumps, and corrupt employees in restaurants or other retail establishments can have skimmers out of sight of customers. Once cards are run through a skimmer, the data are recorded, and the thieves sell the information through contacts or on the Internet, at which point counterfeit cards are made. The criminals go on shopping sprees with their cloned copies of the credit or debit cards, and cardholders are unaware of the fraud until their statements arrive with purchases they did not make.

Skimming is difficult to defeat, but you can take some steps as a first line of defense. When you approach an ATM, gas pump or other self-scan device, check for obvious signs of tampering. Likely places on an ATM are at its top, near the speakers, the side of the screen, the card reader itself or the keypad. If something looks out of place, such as a different color or material or with graphics that are not aligned correctly, it is recommended to not use that device.

Another tip is to push and pull at everything. ATMs are solidly constructed and generally don't have any jiggling or loose parts, and the same is true for pay terminals like gas pumps. Pull at protruding parts, like the card reader. Make sure the keypad is securely attached and is just one piece.

Criminals frequently install skimmers on ATMs that are located in secluded locations, since they don't want to be observed either installing the malicious hardware or collecting the harvested data. The ATMs in banks and inside grocery stores are generally safer than ones outside, at drive-ups or at the sidewalk.

But what about restaurants and stores, where an employee takes your card and you do not see the swipe take place? Treat your credit card as you would a wad of cash, and don't let it out of your sight. That is practically impossible in a restaurant, so if you are concerned, pay cash. If a store clerk has to take your card to another counter, follow him or her.

Lastly, the chances of getting hit by a skimmer are higher on weekends than during the week, since it is harder for customers to report suspicious ATMs to banks. Criminals typically install skimmers on Saturday or Sunday, when the banks are closed, and remove them before they reopen on Monday.

If you do not notice a card skimmer or a dishonest employee steals your card, all is not lost. As long as an individual reports the theft to a card issuer (for credit cards) or bank (for debit cards) as soon as possible, the liability is limited. Personal credit cards usually have a $50 limit, but debit cards vary greatly, so check your bank's policy. Business customers, on the other hand, don't have the same legal protection and may have a harder time getting the money back. Therefore, it is vital to check your business card statements promptly and inform the card issuer as soon as possible.

Most important, if you believe your credit or debit card has been compromised, contact your local police department immediately. Police personnel are trained in investigating such crimes, and a police report is important to have when reporting the loss to the credit card issuer.

—Michael E. Cicero
cicero@nicola.com

Michael E. Cicero chairs the public sector law practice at Nicola, Gudbranson & Cooper and serves as prosecutor for Mayfield Village, Gates Mills and Hunting Valley.