Gotcha! Credit Card Skimming Machines

A Credit Article Contributed by Mark Mcclelland

Skimming Machines and Your Credit Card

Have you ever noticed the little machine the waiter at your favorite bistro used to swipe your credit card through when you were paying your bill? Was the waiter carrying it around with them, and, once you card was swiped did the waiter go to pick up the receipt at the printer? If so, in all likelihood you were skimmed; well, actually, you got fleeced because that little machine the waiter was carrying skimmed your credit card data off the magnetic strip on the back of your card, while you were looking right at them.

And did you know that almost everything about your credit card account except your current credit card account balance is stored on that magnetic strip across the back of the card. It's enough to make you want to rip it off isn't it?

But the sad fact is, this, and similar tactics, are used every day to gain access to your credit card account data. Once the skimmer has your data, it's used to imprint another card, containing exactly the same data as your original card. Now, there are two you's.

And the problem is REALLY big. Skimming losses exceed $1BB per year, and because the skimmer has to have your card their hands - if even for just a split second - most skimming occurs wherever point-of-sale terminals are used.

How Do Credit Card Skimming Machines Work?

So how does a skimming machine actually get your credit card data? Well, exactly the same way the legitimate credit card reader did when you bought that big screen TV last fall just before the playoffs. The machines simply read, store, and decode the information contained on the magnetic strip on the back. The skimmer doesn't need any of the imprint or embossed information (the raised lettering in the plastic - like your name, expiration date, etc.) because that's all part of the data contained on the magnetic strip on the back of the card.

Skimmers can also insert a skimming bug - something akin to computer spyware - into an older credit card terminal. The bug saves credit card data as the cards are swiped through the legitimate machine, and the skimmers then return to the machine every few days to retrieve the stolen credit card data.

Because of these, and other security issues involving the fraudulent use of credit cards, all of the major credit card issuers are working to minimize these activities. For example, they're migrating to chip-based "smart" cards that should eliminate many of the avenues available to today's skimmers. They're also working with technology vendors to enhance the point-of-sale terminals not only so they'll accept these new smart cards, but reduce the likelihood that the machines can be bugged as well.

Is It Easy to Get a Credit Card Skimming Machine?

It used to be that a skimmer had to build their own skimming machine, with the result being that they tended to be rather obvious. But as with all things technological, the credit card skimming machines available today are tiny and are widely available online.

For example, credit card skimming machines can he had for less than $300 on-line, and the equipment required to make counterfeit cards cost as little as $5,000... a mere drop in the bucket when compared to the amount of money the skimmers have access to after skimming only a few well chosen gold or platinum cards. Watch you cards closely.