Our Better Business Bureau has formed a fantastic group of community and business leaders who meet regularly to discuss scams and schemes occurring in our marketplace. We get together create strategies to protect our citizens from an absolute epidemic of fraud.
At our February meeting, we invited the U.S. Secret Service to help us understand the advancements crooks are making in the use of skimming devices to steal credit card data from unsuspecting consumers. The information was astonishing, and many of us left that meeting wondering if the only way to protect ourselves and our money is to cut up all our credit cards and start keeping our cash in cookie jars and mattresses.
Skimmers are electronic data capturing gadgets that steal the information thieves need to make duplicate credit and debit cards, which they then use to make purchases or to withdraw money from their victims' accounts.
Skimmers can be fit fairly quickly over ATM card readers and contain a tiny microchip that stores our card data every time we swipe. Often, a small camera is also placed nearby to record people entering their passcodes, but sometimes con artists even install special keypad overlays to seize our PIN numbers as we enter them.
Skimming thieves are crafty and know how to avoid detection. Typically, they don't leave a device on an ATM or a gas pump for long, and after a few hundred victims have unknowingly offered up a truckload of information from their cards, the crooks remove the data collector.
The information from the cards is in their hands, then, and they use fairly simple technology to download the stolen information to a computer and re-encode it to blank credit cards. Once they've created a duplicate card, they usually make purchases or withdrawals within hours and keep using it until the account empties or the consumer cancels the card.
The Secret Service's Omaha office didn't share any statistics, but said there is a definite increase of activity in the area, particularly related to gas pump devices, and indicated there have been multiple arrests in the last few months where devices were confiscated as well as the equipment needed to create duplicate cards.
The Secret Service distributed some of these remarkable little mechanisms at our meeting and it was easy for our group to understand how they go unnoticed.
They look almost exactly like card readers on many ATMs and they're usually installed with double-sided tape. Thieves monitor locations to be sure the devices remain undetected, and if consumers become suspicious, the bad guys can easily abandon their devices.
More sophisticated skimmers even incorporate Bluetooth technology to collect information without anyone even having to risk the retrieval of a machine.
I've previously advised people to wiggle the card reader to be sure it's appropriately secure and not a taped-on skimmer, but the devices being installed inside gasoline pumps are truly impossible to detect.
Many gas pumps lack robust locks, and the Secret Service reported that it often takes only 30 seconds to open up a pump and set up a skimming device. Regulators place seals on gasoline pumps to assure consumers there's been no tampering, but thieves sometimes use counterfeit seals to replace the ones they break.
Obviously, this poses a serious problem for consumers and financial institutions. According to the Secret Service, the annual losses total $1 billion, so the financial hit banks and credit card companies take is gigantic and the hassle individual consumers face when dealing with these compromises is significant.
Financial institutions work fervently to help their customers fend off thieves such as these, but the consumer must not rely on someone else to notice fraudulent charges or suspicious activity.
Just days after attending the Secret Service's talk, I got a call from a distraught relative in central Nebraska.
My cousin noticed unauthorized charges on his credit card statement and was asking me for guidance. The only time he ever uses the card is to purchase gas, which means his information was likely skimmed at their local service station. Even the gas pump at the friendly filling station in a small Nebraska town might unknowingly contain a nasty little apparatus. It can happen anywhere.
I'm not ready, yet, to resort to cash only or to stashing money around my home. It's Girl Scout season, after all, and my cookie jar is currently filled with Thin Mints.
But the Secret Service's information shocked me. Unless we plan to stop using credit and debit cards entirely, we certainly need to take some precautions.
The following tips are provided by both the FBI and the BBB.
>> Inspect the ATM, gas pump, or credit card reader before using it; be suspicious if you see anything loose, crooked or damaged, or if you notice scratches or adhesive/tape residue.
>> When entering your PIN, block the keypad with your other hand to prevent possible hidden cameras from recording your number.
>> If possible, use an ATM at an inside location (less access for criminals to install skimmers).
>> Be careful of ATMs in tourist areas; they are a popular target of skimmers.
>> If your card isn't returned after the transaction or after hitting “cancel,” immediately contact the financial institution that issued your card.
>> Closely monitor bank and credit card statements for unauthorized charges. Report any questionable charges to your financial institution immediately.
Jim Hegarty is president of the Better Business Bureau representing Nebraska and southwest Iowa. To contact him, email email@example.com or call 402-898-8520.