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Debit & Credit Card Skimming Fraud – How to Avoid Card Skimming Devices

By Erik Folgate

credit card scam skimmingI can vividly remember the day last summer when my wife and I were walking into a movie at the theater when I received a phone call from an unknown number.

I decided to listen to the voice message before we went in for the show. As I heard the words “your bank account has suspicious activity on it,” I got a little worried but figured Bank of America simply didn’t like one of the transactions we had made earlier.  So, I quickly took a look at our checking account transactions on the Bank of America iPhone app. That’s when my stomach shot up into my throat and my heart started racing. I saw two $1,000 deductions from our account for a shady sounding website that we definitely didn’t buy anything from. Our bank account had been compromised, and we were devastated.

The bank told us that the transactions were made using my debit card number. However, the strange thing is that my debit card number was never lost or stolen. Luckily, Bank of America was great about the whole situation and, since you are never liable for unauthorized transactions in your bank account, the money was put back in our account within three business days.

No one ever confirmed this, but given the number of incidences in Orlando over the past year, I am convinced that my debit card was skimmed. I can’t pinpoint where exactly it happened, but I have no other explanation since we rarely buy things online, and no websites have our debit card number stored.

How Card Skimming Happens

Here are four of the most likely ways that your credit or debit card can be skimmed:

  1. ATMs – An ATM skimming device is used and fits over the real ATM card reader slot.  ATM users do not know their information is being intercepted as their card is inserted into the false reader.
  2. Gasoline Pumps – This skimming device is installed inside a gas pump in minutes and is not visible to users.  A gas pump key can fit pump housings in multiple stations, allowing for quick and easy access.  I think this could have been where my card was skimmed.  I get gas in a lot of tourist areas around Orlando where criminals are more likely to go after the pumps.
  3. Handheld Devices - Someone can take your credit card and quickly record the information with a swipe on these small devices.  There were two different cases in Orlando recently of waitresses at restaurants swiping cards with these handheld machines. They were being paid a nominal, flat fee for every card they recorded by a middle man who was then selling them on the black market for big money. Think about it, when you send your credit or debit card off with a restaurant server, it’s one of the only times your card is out of your sight and not in your possession.
  4. Keystroke Loggers – This device can be attached to public-use computers, like those found at the library, or credit card point-of-sale devices to record passwords and other personal data. They can also be downloaded onto your computer as malicious spyware.

Maybe I am being a little paranoid. I could never actually confirm that my card was skimmed. However, through researching credit card skimming in Orlando, I found quite a few instances of people caught targeting areas near where I live and work.

How to Avoid Skimming Fraud

I am convinced that this crime is a real threat. If you agree, here are some tips on how to avoid being a victim of credit card skimming and, ultimately, identity theft and financial fraud.

  • Go to the Bank Window – If you’re going to a bank during office hours, go into the bank and make a withdrawal, or drive up to the teller window rather than taking money out at the ATM.
  • Get Cash Back – Take advantage of the ability to get cash back at a grocery store instead of taking money out at an ATM.
  • Pay Inside for GasPaying for gas at the pump is convenient, but not convenient enough to risk your credit card information. Opt to pay inside rather than using the machine outside.  It’ll only take a couple more minutes.
  • Pay Cash – Make an effort to carry cash and use it more often at gas stations and restaurants.
  • Ask for the Manager – Don’t be shy about requesting that your credit or debit card be run by a manager at a restaurant. Protecting your personal financial information is far too important to worry about offending people.
  • Keep Shopping and Banking on Your Private Computer – Avoid doing any online shopping or banking on public use computers. If you ever do have to use a public computer for these transactions, clear the cache, cookies, and history afterward,  just to be safe.

Final Thought

Credit card skimming can be devastating to your personal finances. I was lucky that my bank notified me quickly and was willing to work with me to counter the false charges to my card. I’m sure others have lost far more to this latest trend in credit card fraud and identity theft. Make sure that you are doing everything in your power to protect yourself.

Do you have any other tips or ideas for avoiding credit card skimming? Share your experiences and ideas in the comments below.

(photo credit: Shutterstock)

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • James Wright

    (1) Go to WalMart or similar and buy a pre-paid VISA gift card. Charge it up with some small amount; say, $100 or so.
    (2) Go online to any merchant you want to use. Provide VISA gift card number to merchant to pay for purchase.
    (3) Recharge VISA gift card as necessary.
    You have now prevented any significant loss; if someone hacks your gift card number, throw it away and buy a new one. Cheap, repeatable loss prevention and mitigation of risk in one package.
    Cheers!

  • Don Leeny

    I find it comfortable and easy just to buy a rebate card from a retailer. I use it to buy fast food and other items with the greatest of ease. In this way my wallet and my cash are never exposed ..Mine is a VISA Debit card and it buys lots of treats, safely and with better efficiency than cash. I got mine at Staples but I’m sure other merchants must have them as well. I never load a card higher than $100.00. That way, if I lose it – its never a catastrophe.

  • Robert Wilt

    Get rid of your debit card and use only a credit card that gives cash back.
    Debit cards are easy for folks who can’t control their spending and profitable for the banks, but debit cards are far more dangerous to your financial health than credit cards. Your maximum liability for false charges on a credit card is $50, and most cards waive that.
    Get the credit card and control yourself by not spending more than you have.
    Pay off in full every month. Pay no interest. Get money back.

  • Jacqueline Du Puis

    I would like to report a lost or stolen Target Red Card and replace it with another one How do I accomplish this?

  • bytor78

    Robert Wilt, You are truly an idiot. Its the other way around. Credit Cards are easy for folks who cant control their spending….Go to ING dierect and avoid the annual fees and interest on CREDIT CARDS, with a debit card and earn 1% interest. Going into Debt with a Credit Card is stupid. I can’t believe your posted something like that! Shame on you and your Mom.

  • JAY

    With the higher liability than credit cards, I am puzzled WHY anyone would consider using debt cards publicly (outside ATMs). Besides the other measures mentioned, I would like to offer one more, for those fortunate enough to bank without a monthly debit service charge. COMPARTMENTALIZE your activity with two accounts- a new ‘private’ account for auto deposits, auto (secure) payments (utilities, etc) from which you periodically ‘refill’ your public account with a transfer online or at branch. If you MUST use the ‘public’ card beyond ATMs, and it IS compromised, the damage stops at the (small) amount in the ‘public’ account, and the account info for the ‘private’ account NEVER GOES OUT to anyone except the legitimate users. This has worked well for my dad’s accounts after he was victimized by phone swindlers(But does not prevent it!) As an additional precaution, do NOT link the ‘public’ account elsewhere for overdraft protection, which defeats the compartmentalization. Yes, its more effort, but protection isn’t free.

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