Protect self from card skimming

By Juanita Lazenby, Army Community Service Financial Readiness CounselorAugust 4, 2011

FORT STEWART, Ga. - The rash of recent card-skimming incidents, such as the one revealed recently involving some 80 Michaels craft stores, reveals just how vulnerable debit and credit cards are to fraud, even if you never lose the card itself. In this instance, more than 90 Point-of-Sale terminals (PIN pads) were compromised and replaced by criminals. Somehow the perpetrators managed to swap these terminals in and out of the stores.

In part, that’s because American credit- and debit-card data are usually stored unencrypted on a magnetic stripe on the back of each card, which thieves can easily and cheaply copy; the more lax security makes them more vulnerable to card skimming.

The theft of card data in the U.S. is increasingly carried out by organized groups of thieves from other countries, thriving black-market forums exist online to buy and sell skimming equipment and stolen credit - and debit-card information.

Gas pumps are a popular target for skimmers, especially during vacation season, when more people are on the road. Skimmers can be inserted inside a pump without any telltale signs.

Crooks are increasingly targeting bank branch ATMs, sometimes installing skimmers in devices near the doors where customers swipe their cards to gain access.

To obtain the PINs, thieves might attach a keypad overlay that captures your number as you type it in, but more often they’ll install a pinhole video camera aimed at the keypad to record what you’re typing.

Criminals can quickly use the skimmed data to create a counterfeit card to withdraw the maximum allowed from each cardholder’s account at an ATM.

Card issuers generally extend zero-liability protection to consumers for fraudulent use of credit and debit cards. But victims of debit-card skimming can still face financial hardships because they are without the cash while the bank investigates, which sometimes takes weeks.

Here are four simple rules to protect you against card-skimming schemes:

1. Avoid unfamiliar ATMs. Thieves have been known to put out-of-order signs on legitimate ATMs and set up nearby freestanding bogus ones that "skim" data from your card. ATMs located inside banks within view of surveillance cameras aren't risk-free, but they pose more challenges for crooks installing skimming equipment.

2. Cover your code. When typing your PIN into an ATM or card reader, use your free hand to shield the keypad from the view of hidden cameras or anyone nearby.

3. Use the credit card option. Card-skimming at gas stations is likely to increase during summer months, especially in vacation areas, so use cash or credit cards at the pumps if possible. If you must use a debit card, select the option to have the purchase processed as a credit-card transaction rather than typing in your PIN. That choice is available at many point-of sale terminals.

4. Monitor your bank account. Reviewing your daily transactions online several times a week instead of waiting for the paper statements, this will assist you in identifying any unauthorized activity, additionally it may prevent you from becoming liable for any fraudulent charges if reported within a certain time frame (will vary depending on the type of card being compromised).

If you believe you have been a victim of skimming, contact your financial institution immediately. For more information on card fraud, Identity Theft, or financial management contact your local Army Community Service, Financial Readiness Program Specialists at 912-767-5058 Fort Stewart, and 912-315-6816.

Adapted from ConsumerAction.org.