Fraud Watch: Credit Card Skimming Is on the Rise

Dear Money & Crisis Reader,

Robert Frank stopped at his local gas station on a warm Thursday evening last September.

He bought $40 worth of gas, paying with his credit card at the pump like he always does.

An hour later, he spent $458 in Target… then $215 at TJ Maxx… $84 at an Applebee’s… and another $400 at Marshalls.

Yet during this spending spree, Robert was at home with his wife, Lucy. And safely in bed when he was supposedly pounding cocktails in Applebee’s.

“My credit card had been skimmed and cloned again,” says Robert. “We noticed it pretty quick this time. This was the third time it had happened in about a year, so we were watching our bank transactions carefully.”

At first, Robert and Lucy weren’t sure how their credit card details kept getting stolen. They even started using a P.O. Box, in case the thieves were stealing their mail somehow. 

But after the third time getting scammed, they were able to identify their local gas station as the common denominator. 

“Apparently, these guys can tamper with the card slot and rig it to steal your credit card details,” says Robert. “All it takes is 30 seconds to hook it up and then these guys are gone.

“When I called the bank, they told me the robbers could use that information to create a fake card that could actually be used in stores like a regular card.

“These guys were obviously pros.”

Each time, Robert and Lucy were able to dispute the charges and have them wiped. But Robert says the process was drawn out and stressful in every instance.

Meanwhile some folks aren’t so lucky. Depending on how long it takes you to notice the discrepancies, you can incur anywhere between $200 and $2,000 in fines. And debit card owners report that it can take months to have their money refunded.

This isn’t just an isolated instance. FICO reported a 39% rise in skimmed cards at U.S. ATMs and merchants in the first six months of 2017.

Gangs of organized thugs across the nation have realized they can steal thousands of dollars at a time with relatively low risk of getting caught.

The only way to avoid getting scammed is to be aware of the problem and know their tricks. Below are the top ways to protect yourself.

A Strong Defense Against Card Skimmers

• Inspect the card reader before inserting your card. Skimmers are often loosely attached. If there are loose parts or scratches or something doesn’t seem right, do not use the machine. Contact the bank or someone in the gas station right away, as well as law enforcement.

• Don’t pay at the gas station pump. Go inside and pay at the counter when possible.

• If an ATM or credit card machine looks strange or your card doesn’t enter the machine smoothly, don’t enter your pin. Eject your card and use a different machine.

• Protect your pin when punching in your code. Some criminals install small cameras to steal your code.

• If your card is stuck inside a machine, call your card issuer immediately to report it. Some criminals have devices that can physically capture your card. Cancel your card and request a new one immediately.

• Never use an ATM if anyone is lingering nearby. Don’t engage in conversations with others around an ATM. This is a common distraction technique.

• Check your card transactions frequently using online banking and your monthly statement. The bank’s fraud unit might spot unusual spending patterns and notify you, but this is the only surefire way to make sure you’re not being scammed.

• Ask your card provider if they offer account alert technology that will deliver SMS text communications or emails to you in the event that fraudulent activity is suspected on your payment card.

• Update your address and cellphone information for every card you have so that you can be reached if there is ever a critical situation that requires your immediate attention.

As always, we welcome feedback from our readers. If you agree, disagree or have any financial horror stories of your own, you can email me right here.

All the best,

Owen Sullivan
Editor, Money & Crisis

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