Picture this: You’re at home in Georgia but you get a call from your credit card company verifying if you’re in Kansas City purchasing a laptop computer. It’s likely you’re the victim of a credit card skimming operation. What’s happening and what do you do?
Most commonly, someone somewhere has probably taken a second swipe of your credit card information. It could have been a shoe store clerk, a bartender, a waiter or anyone else where you’ve used your credit card (or credit card branded ATM card) to pay for a purchase.
Your credit card has a thin strip of magnetic material on the back encoded with your account information. The magnetic strip is “read” by a merchant terminal when it is passed through the reader to automate your purchase. The magnetic information is what a thief needs.
An unscrupulous store clerk or waiter is “recruited,” usually on the promise of quickly making hundreds or even thousands of dollars, and he swipes your card a second time through a small device called a “skimmer.”
The skimmer captures the magnetically encoded information from your credit card, or linked ATM card, and stores it into its internal memory. [The term “skimmer” can refer to both the device used to capture the information and to the person who uses the device.]
The skimming employee is paid based on how many credit card numbers he was able to steal. Some recruiters even focus on particular card types and pay more for high credit limit cards like “platinums.”
False-front ghost overlays
Another variation of skimming is to cut out the low-level worker from the equation. Skimming rings which have the technical know-how place false fronts or “ghost overlays” over the card readers common to ATM machines, gas stations and stand alone point-of-sale locations. The false front mimics the look of the actual ATM or credit card slot used by customers to access their accounts or to make purchases. It contains a secondary skimmer that reads the customer’s account information as the card passes by. Sometimes the false front set up will include a small wireless camera hidden nearby that captures the customer’s PIN number. The false-front skimmer is later retrieved by the thief.
Many gas station owners are participating in a voluntary program to thwart gas pump tampering. Pump security seals, which are tamper-proof labels bearing unique serial numbers, are adhered to the gas pump cabinet near the credit card reader. When intact, the label has a flat colored background, usually solid red, blue or black. However, once the pump panel has been opened, or an attempt has been made to open the panel, the seal of the label is broken, and words such as "VOID" or "Void Open" appears in white on the face of the label. Consumers should avoid using a pump bearing a seal with "VOID" since the pump may have been compromised.
The ‘Net’ effect
Industry and law enforcement sources estimate credit card fraud losses exceed a billion dollars annually. And, it’s no wonder why, when thousands of skimmed credit card numbers can be sold and emailed anywhere around the globe in seconds.
Skimming affects each and every one of us. Fraudulent credit transactions are often charged back to the merchant that accepted the card. The merchant recovers the cost of fraud by raising prices. Banks defrauded during skimming operations may be accountable for charges passing through their system when the point-of-sale merchant cannot be charged back, raising consumers’ cost of banking services.
Skimming and skimming-related credit card activities violate federal and state laws. Some of the possible criminal violations in Georgia include:
- O.C.G.A. Section 10-15-4 Prohibited Activities Involving Magnetic Strip or Stripe on Payment Card (skimming)
- O.C.G.A. Section 16-9-31 Financial Transaction Card Theft
- O.C.G.A. Section 16-9-32 Forgery of a Financial Transaction Card
- O.C.G.A. Section 16-9-33 Financial Transaction Card Fraud
- O.C.G.A. Section 16-9-34 Criminal Possession of Financial Transaction Card Forgery Devices
- O.C.G.A. Section 16-9-35 Criminal Receipt of Goods and Services Fraudulently Obtained
- O.C.G.A. Section 16-9-36.1 Criminal Factoring of Financial Transaction Card Records
- O.C.G.A. Section 16-9-121 Identity Fraud
The use of a victim’s identity and credit card information collected through skimming is identity fraud. Fraudulent transactions may “flag” a victim in merchant or credit grantor’s database, hindering the victim from using existing accounts or establishing new accounts.
The federal Truth-in-Lending Act limits a consumer’s liability to $50 if a credit card is lost or stolen and the loss is reported timely – in these instances, most credit card issuers routinely waive the $50 fee. More difficult is straightening out credit reports once a thief has stacked up fraudulent credit card charges in their name.
Most importantly, consumers should act quickly. You should routinely look at your credit card and bank statements, looking line by line at their charges. Contact your credit card company and dispute any charges that appear to be unauthorized, even if it is only for one or two dollars.
Skimmers sometimes test stolen card numbers by placing an Internet order for a small-dollar amount item just to see if the transaction will clear.
Pay attention when you present your card for payment. If you’re uncomfortable following your credit card to the merchant’s terminal, you might be able to reduce your chances of skimming by making eye contact with the person who accepts your card for payment, asking for your receipt and acknowledging them by name.
Keep receipts to compare against your monthly statement. Sign up for online access to your credit card account, if it is offered. Keep in mind that the sale and use of your skimmed credit card number may happen quickly, or not for weeks or months later. Be vigilant about reviewing your account frequently.
What to do if you become a victim
Contact your local police or sheriff’s department and report it. Have a copy of your credit card statement available for the officer or deputy to take with them for the report, if needed.
As soon as possible, notify the credit card company to preserve your rights and to prevent additional fraud transactions. Look for the number on the back of your credit card or on your monthly statement. Follow up on all actions you take. Put it in writing and retain copies. Most likely, your credit card company will close that compromised account and issue you a new card with a different account number.
If you have not already activated a credit freeze, do so immediately.
Keep your good credit standing by contacting the three major credit bureaus:
Equifax : 1-800-766-0008
Experian: 1-888-397-3742 and
Trans Union: 1-877-322-8228
Ask to have a fraud alert placed on your credit record, and dispute any unauthorized charges with the merchant. Ask merchants to investigate your complaint and report their findings to the credit bureau.
Finally, file a complaint with the Georgia Attorney General's Consumer Protection Division at 404-651-8600 or at 1-800-869-1123 (toll-free in Georgia). Even though we’re not able to assign each individual complaint to a sworn criminal investigator, we do look for patterns of skimming transactions and, in these instances, we may investigate your complaint along with others to arrest those responsible.