How Should Debit And Credit Card Users Protect Themselves Against Skimming

In today’s high tech world, you stand a much better chance of becoming a victim of credit card and identity theft than a robbery committed in person. Thieves have a number of crafty technology based ways to steal your personal information, often including credit card numbers, bank account information and other financial information.

Skimming represents just another one of these new technology based ways to steal from you. These schemes are designed to steal your money or your identity without you even knowing about it. They also make it harder to capture the assailant. Knowing about these schemes and taking steps to prevent them is your best chance of avoiding them.

What Is Skimming?

The term skimming refers to a criminal using a small electronic device to steal the information off of a credit or debit card’s magnetic strip. These little electronic devices are easy to find, easy to install and can transmit stolen information to the criminal. In many cases the thief doesn’t even have to be present to steal your card’s information.

Skimmers typically work in two ways. One of these ways doesn’t require a person to be there in order to steal the information, instead a skimmer device is attached to a regular credit card scanner. This often occurs at pay at the pump gas stations and ATMs. You slide your card through the regular reader and the skimmer at the same time and your card’s information is electronically sent somewhere else.

At ATMs thieves may also use hidden cameras to steal your PIN. The other way that skimmers can be used involves a thief disguised as a store clerk or waiter. When you give the person your credit or debit card, they swipe the card through the skimmer and steal information. This often occurs at pubs, restaurants and retail stores.

What Does A Skimmer Do With Your Information?

When your credit or debit card is run through a skimmer, the information about the card hidden in the magnetic strip is copied and sent to another location. Once there, a criminal can create a duplicate card or use the information to transfer funds from the card to another hidden account. This can result in a large amount of stolen money and also identity theft. Often the thief will steal only small amounts of money or make little purchases over a period of time to prevent the real owner of the card from suspecting. Other times they will simply rack up thousands of dollars in debt.

How Can You Prevent Skimming?

You can prevent skimming by being aware of how it occurs. Never use a card reader that looks odd or appears to have been tampered with. If it looks different from other card readers or makes it difficult to slide the card through, then do not use it. Other warning signs include signs that say the machine is out of order and directing you to another location or machine. Any extra machinery or devices that look different from the rest of the machine should be avoid. It is helpful if you use the same machines over and over, because then you will recognize if anything looks different. Be aware of your surroundings and of the card readers you use.

Whenever you hand your card to a clerk or waiter, carefully watch what they do with the card. Be aware of them swiping the card more than once or if they use two different machines to swipe the card. Never let them walk out of your sight with your card. Either follow them in order to watch or take back your card. Use cash when possible at restaurants and pubs. Also, keep a close eye on your card statements.

Look for small charges and large ones. Keep in touch with your spouse about which purchases you each made. This is especially important for cards that you do not use that often. Many times a thief will steal the card’s information, then they will make a small purchase just to see if the card has been reported as stolen. If it has not been reported, then the thief can go on a serious shopping spree with your money. Shred all of your financial documents and cut up all unused or older credit and debit cards before you dispose of them.

What Do You Do If You Have Been Skimmed?

If you suspect that someone has skimmed your credit or debit card and stolen your information, you should report this to your bank as soon as possible to void liability. Many credit and debit card companies have protections against thefts, meaning you will not be liable for the stolen funds. In order for you not to be liable, you must report stolen information right away. The next step should be to call the police and file a claim.

If you think at your identity has been stolen, you should contact the credit agency and place a freeze on your information. By doing this the credit agency will have to notify you before any credit can be given in your name. You can also have the agency monitor your account for you. This may cost extra, but it may be worth it to prevent the horrors of having your identity stolen. Always keep your personal information and PIN numbers secret. When typing in your PIN, try to hide the keypad with your hands as much as possible. Use different PINs too.

If you suspect that an ATM or credit card reading machine has been tampered with, let the machine’s owner know right away. Many times the device was installed without the owner’’s knowledge. The machine’s owner may be involved in the scheme, so you should also report obvious tampering to the police. Being aware of how skimmers access your credit or debit card information will help you to prevent becoming a victim. Know that it is possible to skim credit cards almost anywhere and keep a close eye on your cards and the information they hold.

Timothy Ng lives, breathes, and sleeps personal finance! Check out his in-depth guide to doing a balance transfer for life where he answers everything you need to know before doing an online credit card application. Tim is not endorsed by or affiliated with LPL Financial. Tim is not endorsed by or affiliated with LPL Financial.

Creative Commons License photo credit: B Rosen

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Comments | 1 Response

  1. says

    Great article man. I’m a Financial Advisor too. I’m thinking about going for my CFP. I will be back to check out your site some more.

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