The BBB of Central California is issuing a Skimming Warning to all consumers using debit cards or credit cards for point of sale purchases.
Skimming, a form of high-tech financial fraud, is on the rise worldwide. It relies on sophisticated data-reading electronics to copy the magnetic stripe information from your credit card or debit card. It can capture both your credit card number and your PIN. And it's happening at restaurants, neighborhood gas pumps and ATM machines.
Today a criminal merely has to slip an electronic magnetic strip reader over the existing card slot at an ATM, or replace a point of sale device. When you slide your plastic in, the skimming device reads it first, and then the actual card reader does--at which point the transaction proceeds as expected. But now a crook has an exact copy of your card data without your even realizing it.
Gas stations may be the most vulnerable outposts. Pumps today are largely automated and often unattended, giving criminals plenty of opportunity to embed skimming devices in them late at night.
ATMs are vulnerable for the same reasons that gas pumps are: They're exposed and unattended. Criminal organizations have targeted ATMs throughout Europe and have started hitting major cities in the United States, too.
Debit cards are even more desirable to thieves because the bad guys can plunder a bank account quickly and completely without the account holder's realizing what's happening. The card networks monitor credit card usage, and they have rigorous risk- and fraud-prevention policies in place. In contrast, debit cards are linked directly to a bank account, though obtaining the PIN associated with a debit card is somewhat more difficult.
Even so, when standing at an ATM, if you have any reason to suspect that the machine may be compromised, don't use the machine. You may want to run your finger along the card slot to see whether anything comes loose or feels mismatched. If so, report it to the bank and find another ATM to handle your transaction.
Compromises at point-of-sale terminals are much harder to detect, especially at gas pumps. Your safest course is use a credit card instead of a debit card when paying for gasoline, since the card networks will detect and stop fraud quickly. Credit card consumers are often covered by zero liability programs; but with debit cards, that may not be the case, depending on your bank.
To report a fraud or scam, call the BBB Hotline: (800) 675-81118 ext 331