It wasn’t that long ago that most people relied on cash to buy products and services. Today, almost everybody uses a credit card or a debit card to pay, whether they’re shopping online or at the supermarket. As with any advancement in technology, there are some security risks that come with paying with a card and you should be educated about them.
At Leaders Credit Union, we believe in helping our members achieve their financial goals, and we consider financial education of our members to be an essential part of what we do. We know our members are concerned about security and we are often asked the question, "What is card skimming?"
That’s an important question and one we’re happy to answer. Here’s our rundown of what credit card skimming is and how to avoid it and protect your money.
What Is Card Skimming?
Card skimming is a crime that occurs when criminals install a device known as a card skimmer or skimming device anywhere that consumers use credit or debit cards. Skimmers may be installed at any legitimate card reader, including the following:
- Point-of-sale terminals (card readers in stores, for example)
- Fuel pumps
When a credit card or debit card is run through the skimmer, it “skims” the credit card data, including the credit card number. Once the thief accesses the credit card information, they can use it to create fake cards to make purchases or to engage in other types of credit card fraud.
An ATM skimmer is typically used in conjunction with either a camera that records PINs or a fake keyboard that fits over the existing keyboard to capture PINs.
According to the Federal Bureau of Investigation, debit and credit card skimming costs consumers and financial institutions more than $1 billion every year and is a major concern.
What Does a Credit Card Skimming Device Look Like?
One of the best things you can do to protect yourself is to learn how to avoid card skimming by recognizing what skimming devices look like. We should note here that some skimmers are installed inside the machine in question, something that’s most common with fuel pump skimmers.
Let’s start with a review of what external skimmers look like. These are typically designed to fit over the existing, legitimate card reader. In other words, they may look real. Here are some pointers to help you spot them:
- Look for credit card readers that look too large for the machine they’re on. For example, a lot of ATM card readers have arrows pointing to the slot where you should insert your card. If the card reader is covering the arrows or seems too close to them, there may be a skimmer installed there.
- Look for card readers that are crooked or don’t seem to be installed properly.
- Pay attention to color differences between the rest of the machine and the card reader.
- Look inside the card reader to see if something has been inserted there. Some skimmers are thin electronic panels that can fit inside an existing reader.
- Pay attention to the keyboard. Some criminals put their own keyboards over existing keyboards to capture PINs.
- Look for scratches or other damage around the card reader or keyboard.
The Federal Trade Commission has pictures of skimmers on its website. You can view them to get an idea of what they may look like.
One of the most helpful things to do is to familiarize yourself with the ATMs for your financial institution. Look at in-branch ATMs, since these tend to be less vulnerable than external ATMs. Most credit unions and banks have the same ATMs everywhere, so any differences are noteworthy and can help you avoid skimmers.
How Do You Avoid Credit Card Skimming?
Now that you have some pointers about how to spot credit card skimmers, let’s review some of the things you can do to protect yourself.
Use a Chip Card
Chip cards offer protections that credit and debit cards with only a magnetic stripe don’t. It’s still possible for thieves to get information from chip cards but they are less vulnerable in some ways.
We should note here that the EU is several years ahead of the United States in using chip technology, so criminals there have had a head start in figuring out how to bypass chip security. Internal card “shimmers” can still lift information from a chip card, but the internal information is encoded, making some aspects of fraud related to card skimming more difficult for criminals.
Check Every Card Reader Before Using
We recommend getting into the habit of checking every card reader before you use it. You don’t need to spend a lot of time on your inspection, but it’s helpful to look for scratches, misalignments, and anything else that feels out of place.
If you’re at your credit union or bank, take a quick look at the next machine over and make sure they look the same. If they don’t, then be wary of using any machine that looks like someone may have tampered with it.
Avoid ATMs and Card Readers That Are Isolated
It’s a lot easier for a criminal to tamper with a card reader that’s in an isolated area or in a vestibule than it is to tamper with a point-of-sale reader that’s never left unattended, or an ATM inside a financial institution. If you’re using a fuel pump, pick one that’s in direct view of the attendant, since these are less likely to be targeted by criminals.
Avoiding isolated card readers is one of the best ways we know to avoid card skimmers. It’s not impossible for a closely-monitored card reader to have a skimmer installed, but it is less likely to happen than it would be with an isolated card reader.
Avoid ATMs in Touristy Areas
ATMs in tourist areas are highly coveted by thieves because they typically do a lot of business and the people using them won’t be familiar with the area and may not be as watchful as they should be.
If you’re traveling, try to get the cash you need before you head out, so you’re not stuck using an isolated machine that may be rigged with a skimmer.
Cover the Keypad with Your Hand
Since many criminals install a pinhole camera to record PINs, you can protect yourself by cupping your hand over the keyboard while you enter your PIN.
This simple trick may be enough to prevent the camera from recording your PIN and the person who installed the skimmer from using your card information.
Trust Your Instincts
There may be times when there is no visible sign of a skimmer, but you still feel that something’s wrong. When that’s the case, we strongly recommend trusting your gut instincts.
If something feels off, your best bet is to go somewhere else to get money or make a purchase. You’re far more likely to regret throwing caution to the wind than you are to regret putting off your purchase or withdrawal.
What to Do If You Suspect a Skimmer Has Stolen Your Card Information
What happens if you use your credit card or ATM and realize after the fact that there was a skimmer installed? The steps are the same as those you would follow with any card-related issue. Here’s what to do:
- Freeze your card. Your financial institution or credit card issuer will have a phone number or a mobile app (or both) where you can alert them of an issue with your card and put a freeze on it. This step will prevent a criminal from using your card number to make purchases or withdraw money.
- Notify your financial institution. If you use a mobile app to freeze your card, you may need to contact your credit union or bank separately to notify them of the issue and ask for a fraud alert to be put on your account. You should also request a replacement card with a new number.
- Put a freeze and fraud alert on your credit. Since credit card fraud can impact your credit report, the next step is to contact the three main credit bureaus (Equifax, Experian, and TransUnion) and put a freeze on your account. Credit freezes are free and you’ll need to create a PIN to “thaw” your credit when you need to. You should request a fraud alert at the same time.
- Report the skimming to the authorities. You should report the incident to your local police. If you suspect that your identity has been stolen, visit IdentityTheft.gov to report it.
- Review your credit reports. At the same time you freeze your credit, we recommend requesting copies of your credit reports. Review each one and identify any suspicious or fraudulent activity, then dispute the listing with the credit bureaus.
Keep in mind that failure to report card skimming can negatively impact your credit report. It’s your responsibility to report any fraudulent activity as soon as you become aware of it. The Fair Credit Billing Act limits your losses to $50 for credit cards.
Avoid Card Skimming with Leaders Credit Union
Card skimming is an issue that can’t be ignored. The guidelines and tips we’ve included here will help you learn how to spot skimmers and how to protect yourself if you use your credit or debit card at an ATM or fuel pump with a skimmer attached.
At Leaders Credit Union, our members' financial security is our top priority. That's why we've created our Ultimate Fraud Prevention Help Kit, a comprehensive guide that dives deep into everything you need to know to protect yourself from financial fraud.
Report Scams to the FTC
If you were scammed or think you saw a scam, report it to the Federal Trade Commission.