Beware of Credit Card Skimmers

Posted September 29, 2009 in Creditor/Debtor by

I use my credit card for almost all of my purchases, because it helps me track my spending and manage my budget. On days when I’m running a lot of errands, I swipe my credit card so frequently that I could do it with my eyes closed: Swipe. Press "Credit." Press "OK." Sign in the box.

These days, however, it pays to be a bit more attentive when using your credit, debit or ATM card. That’s because clever thieves have a new weapon in their arsenal of tools designed to part you from your money: the card skimmer.

Skimming, as it is known, occurs when a thief uses a device, known as a skimmer, to read and record the magnetically stored information on your credit, debit or ATM card. Skimmers can be placed on top of legitimate credit card readers and ATM machines, or can be handheld devices. Because the magnetic strips of credit, debit and ATM cards are electronically encoded with data such as your name, account number and card expiration date, thieves can then copy this information onto counterfeit credit cards that are used for fraudulent purchases.

Unfortunately, there are no regulations prohibiting or limiting the sale of credit card skimmers, so you or I could buy one today for just a few hundred dollars. This makes it very easy for dishonest business employees and other thieves to start skimming information from your credit, debit and ATM cards.

There are a few ways that you can protect yourself against skimming.

  • If you give your card to a store clerk or waiter, try to keep an eye on it. Some thieves will pay store employees to swipe a credit card through a skimmer–which may be smaller than a pager–before they swipe your card through the business’s regular card reader. The information on the skimmer is then sold to counterfeiters who download the information and use it for fraudulent transactions.
  • When using machines where you personally swipe your card, notice whether the credit card swiper looks different than normal, or if it seems to be clunky, or shoddily attached to the machine. (But know that skimmers may be installed inside the machine, or may be otherwise unrecognizable.) Gas pumps, ATMs and DVD rental kiosks are more likely to be outfitted with skimmers because employees do not constantly monitor the machines. This makes it easy for a thief to quickly attach a skimmer at night or on the weekend. ATM machines may also be outfitted with pinhole cameras designed to record your PIN number, so make every effort to cover the keypad when entering your PIN.
  • Carefully review your monthly bank and credit-card statements for any signs of fraudulent activity. If you don’t recognize a charge or withdrawal, contact your bank or credit card company immediately and dispute the charge. In the United States, you can only be held responsible for up to $50 of fraudulent activity on your credit card. However, your liability can be much higher on ATM and debit cards. If you notify your bank within two business days of learning of that your card has been stolen or used fraudulently, your loss is limited to $50. If you wait more than two business days, you could be liable for up to $500 of losses, and if you wait more than 60 days to report fraudulent activity, your losses could be unlimited.

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