Credit Card Skimmer Scams: How to Avoid Being a Victim
Some simple precautions can go a long way toward protecting you
Thieves can steal your credit or debit card information in numerous ways. They can get your PIN and make cash withdrawals from your account using hidden cameras, or simply by standing nearby and watching as you tap in the numbers. You might hand your information over to them without even realizing it, but consumers can take precautions.
Skimming is not on a decline, despite strides to keep pace with it and the fact that we know more about it than ever before. FICO, the developer of the leading credit score method, reported in 2018 that the number of hacked card readers increased by 30% in 2016, and hacked cards rose by 70% in the same year. Most of the card readers were located in convenience stores and other non-bank locations.
How Credit Card Skimmers Work
A card skimmer is a small, hidden device that collects your card information. It reads your card number, which can then be used to print fake cards or for online payments.
They're often installed in places where you normally swipe your card without thinking too much about it: on ATM machines, gas pumps, and payment machines at merchants' locations. They're difficult to see—often just a piece of plastic over the normal card slot, but there’s a tiny computer inside.
Skimmers can quickly read everything when you use your card, and they store that information for thieves to harvest later. Some skimmers send the information wirelessly, which reduces the risk for thieves. They don't have to return to collect their gadgets.
Skimmers generally don't interfere with your transaction in any way, so you won’t know that your card has been compromised. Your card passes right through the skimmer, and everything seems normal.
Skimmers can also be mobile devices, tucked away in someone's pocket. If you hand your card to a dishonest waiter to pay for dinner, it only takes a second to run your card through a skimmer while he's walking to the cash register.
Skimming scams often use hidden cameras and other equipment to capture your personal identification number (PIN). The cameras can be surprisingly small and well-hidden. They might be part of furniture or fixtures that look like they belong where they are, or even tucked into nearby magazine racks.
Another technique is to alter the keypad with a device that records your PIN, possibly by placing a fake keypad over the original one. Heat-sensitive cameras on mobile devices can also help with figuring out your PIN.
Gas Pump Scams
More Americans reported suspected skimming at gas pumps in 2018 than the year the year before: 23% as opposed to 15%. Pay-at-the-pump terminals at gas stations are among the least secure card readers.
ATMs are definitely skimming hot spots. Tiny, hidden cameras in these locations are surprisingly common. Tap in your PIN and it's captured for posterity...or at least until the info is transmitted back to the thieves' locations.
Another common trick is the use of fake keypads. You might find these situated atop the real keypad. It's a close fit so you might not notice if you're in a hurry.
How to Avoid Skimming Scams
You can make it harder for somebody to steal your information with a few simple steps.
- Know your location: It’s best to swipe your card in secure areas. For example, an ATM located in a bank lobby is relatively safe because the bank is locked at night. The ATMs are regularly serviced, and there's constant video surveillance at the site. Thieves take a significant risk when they try to install and retrieve skimmers here.
- Protect your PIN: Cover your hand with your other hand when you enter your PIN, no matter where you are. This makes it harder for cameras to record it, and it prevents anybody from watching what you enter.
- Walk away: Simply leave and use a different machine if something strikes you as odd or out of place. Skimmers sometimes stick out an extra half-inch or so, although many of them are extremely well-designed and difficult to spot. You can also give the card reader a little jiggle before you insert your card. If it’s loose, that’s a red flag.
- Don’t accept “help”: You'll also want to leave if a stranger hanging around the machine offers to help. Decline the offer and be on your way. She might say that she had trouble as well, that you just have to enter your PIN again, and here—she'll show you.
- Always keep your card: Almost all waiters and merchants are honest, but you might want to avoid letting anybody walk away with your card, even for a few seconds and particularly in an establishment that you're not familiar with. You're probably OK with a server who's been there, waiting on you, for years, but otherwise offer to walk to the payment machine with him so you can watch the entire process.
- Use secure payment methods: Pay without swiping your magnetic strip through a card reader whenever you have the option. Mobile wallets like Apple Pay encrypt your information, and touchless payments can also be secure.
- Contact your bank immediately: Contact your bank as soon as possible if anything strange happens. Your bank can act quickly to avoid losses if an ATM keeps your card or if you suspect that you’ve used a device with a skimmer. You’re often protected from fraud in your account as well, but your liability will increase as time passes.
Smart Cards with Chips
Smart cards with chips are increasingly reducing the effectiveness of skimming scams, and more and more banks and credit card lenders have made the transition to using them these days. But magnetic cards are still regularly issued as well, and you often need only a card number with additional information like a three-digit code on the back to pay for something online. Skimming will remain fairly easy until the entire world moves away from magnetic stripe payments, although you can destroy your magnetic stripe if you’re confident that you’ll never need it.