Security Tips - Archive

Security Notice: Credit Card Cloning or Skimming, September 26, 2006

Credit card cloning, or "skimming" as it is sometimes called, is a technique whereby someone obtains your credit card details, copies them onto a bogus card and begins using the credit card. While credit card theft itself is not new, the manner in which the information is stolen is.

The first step is to recruit an individual willing to participate in the scheme. Bartenders, wait staff or shop assistants are often prime targets because of the sheer volume of credit cards they handle.

Recruits are given a pocketsize device with a scanning slot, something that resembles a pager and can be worn on a belt. They are instructed to swipe customers' credit cards through the device. Because the process takes only a few seconds it can be done easily and inconspicuously without the customer or another employee noticing.

Swiping the credit card through the device copies the information held on the magnetic strip into memory. That information can subsequently be copied to a counterfeit card, complete with security holograms.

Alternatively, the information can be used to overwrite a stolen credit card which has become too hot to handle. Financial industry sources estimate that losses associated with credit card fraud are in the billions of dollars annually. The Secret Service is the primary federal agency tasked with investigating access device fraud and its related activities under Title 18, United States Code, Section 1029.

Although it is commonly called the credit card statute, this law also applies to other crimes involving access device numbers including debit cards, automated teller machine (ATM) cards, computer passwords, personal identification numbers (PINs) used to activate ATMs, credit card or debit card account numbers, long-distance access codes, and the computer chips in cellular phones that assign billing. During fiscal year 1996, the Secret Service opened 2,467 cases, closed 2,963 cases, and arrested 2,429 individuals for access device fraud.

Industry sources estimate that losses associated with credit card fraud are in the billions of dollars annually.

To combat the cloning of your credit card you should take the following precautions:

1. Never let your credit card leave your sight when providing it to a waiter/server.
2. Be very careful to only use reputable and verifiable companies/web sites when providing your credit card number for internet purchases.
3. Frequently monitor your account statements.
4. Never respond to internet solicitations for your credit card/personal information even if the request appears to be from your bank or credit card company.

For information on what you should do if you become a victim of credit card fraud or identity theft, visit the following website: http://www.secretservice.gov/financial_crimes.shtml