Credit Card - Fraud (Part II)

Skimming

Skimming occurs when an unscrupulous employee at a legitimate merchant takes a second copy of the card details on the magnetic strip before processing the payment through the official EPOS terminal. This copy of card details is sold on the black market to fraudsters who clone the cards.

Skimming of magnetic stripe details together with recording of PIN numbers entered into ATMs has been seen, where a small skimmer device that reads the magnetic stripe is attached to the card slot of an ATM, together with various devices to monitor the keypad, either by attaching a fake keypad over the genuine one, or by remote-controlled spy camera.

Skimming of magnetic stripe details has become slightly less prevalent since the introduction of CVV or CVS codes, which are not encoded on the magnetic strip, but are printed on the card — normally on the reverse of the card.

Skimming is impossible with new EMV cards that have a small computer chip which is read by POS terminals.

But, beware! A new chip reader/writer has now appeared on the market for less than $1200. It captures the data and then writes it on another card, known as a clone. Also PIN number capturing pads are now available, so watch out where you use your pin with your card.

Skimming is most common in restaurants where the waitress/waiter has to take your card to the register and scan it. Be very cautious of this when at restaurants. Try using cash in places like this where you do not physically watch your card being scanned.