Friday, November 20, 2009

Credit Card, Debit Card or ATM Card Skimming

Off late one of my colleagues received a letter from her bank that her Debit Card has been skimmed i.e., forged and the perpetrator has withdrew 1200 Euros somewhere in England from her account by duplicating the card. Well, being a Japanese, she could not understand the real content of the letter which was in German, and then she ignored it. Yet, when she had been to the bank to withdraw some money, she could not able to do it. Then she printed the statement to get shocked that there is no money in her account. She was panicked and reached the bank where the entire fraud has been narrated to her which left her with both shock and embarrassment. Well, that is when I heard first time like many others, about “Skimming”.

We have been hearing about Credit Card frauds every now and then. To add to this list, the biggest ever fraud discovered recently in Spain whereby many banks in Europe and almost all the banks in Germany are the victims of fraud. It has been found out that some fraud ring from Spain has skimmed both visa and master cards from the European customers. Therefore many German banks have recalled more than 100,000 cards so far.
What is Credit Card Skimming?
Credit Card Skimming is theft of Credit Card Information used in legitimate transaction. This is considered to be “inside job”, as some dishonest employee of a legitimate merchant misuses the credit card information of the merchant’s customers. The thief procures the credit card information by photocopying payment receipts or in a more advanced methods such as using a small electronic device called Skimmer which when swiped thru stores hundreds of customers’ cards’ details. A small keypad is used to unobtrusively transcribe 3 or 4 digits of security code which is not present on the magnetic strip.

How do you become a victim of Skimming?

Well, the most common chances of getting skimmed are restaurants or bars where the skimmer possess your credit card for short time out of your immediate view.

Nowadays the thieves are inserting a device in the card slot of the Automatic Teller Machines (ATMs), which reads the magnetic strip as the user unknowingly inserts the card in the slot. These devices are used in conjunction with a pinhole camera to read the user’s PIN at the same time. This is how besides credit cards, the bank cards are skimmed, duplicated with the bank details, distributed and used somewhere in the World. It does not mean, every ATM is skimmed, it usually happens with the ATMs located in the remote places, Gas/Petrol Stations, Open ATMs in public places.


How can you protect yourselves and what are the measures you have to take incase of the theft?

To some extent it is out of your control to protect the theft of the data, yet being careful can avoid possible risk.

  • Avoid using the remote ATMs, ATMs at Gas/Petrol Stations on Highways and open ATMs at public places.
  • Do not use the machines where you suspect any manipulations.
  • Regularly check your bank statements and in case if you find any unauthorized withdraws, you can immediately block the card and inform the bank. For banks in Germany, you can use 01805 / 021021 or 0049 / 1805 - 021 021 round the clock.
  • If you notice any theft of your card or theft of information, immediately report the theft by calling the central emergency number of Germany 116 116. It is also centre to the liability for possible fraud with the card. In addition, you need to file a police compliant and inform the bank. Sometimes if you inform the bank, the banks shall guide you in filing the police compliant and with further follow up.
  • Pay attention when you enter the PIN at ATMs, make sure you cover it with your free hand.
Do my Banks pay for the data theft or being skimmed?
In the most cases, if the data theft has occurred not because of your negligence, then banks shall pay for your loss as usually every customer is insured for fraud with your account.
Well, atleast my friend got her lost 1200 Euros after 45 days from the bank. I know since she and we are living in Germany, we are a bit lucky that still banks care for the customers and some or the other way, the accounts are insured and the lost amount is being paid. Well, it does not happen everywhere.
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  1. 1200 euros...bloody hell...u know i am hearing abt these things here in India too...I think something must be done about it...I dunno what though

  2. this must be worst crime after identity theft.

  3. Hi! Your blog is very informative. Wells Fargo has been good to us. BUT as you know already, the credit card companies along with the bank are most likely the biggest thiefs of all. My fave of their "newer" rules is when they pull your credit report to see if you were "naughty" in paying your electric bill or something else "late" - so they can jack up the interest rates...Like i said Wells Fargo has been good to us, but it's more the "banker" we have then anything else. Walmart and Walgreens takes ECHECKS, just to warn you. Someone got a hold of my checking info last June and ran up $500 in merchandize - luckily i check on banking online every night like clockwork; wells fargo replaced it but the rent check bounced and their consumer fraud division kept assigning me new case numbers after each customer service rep i spoke with couldnt find a record of me reporting the fraud...LOL

  4. i think that's all will happen because we believe on machines which we made but beliving on machine is not a very worst thing but world changing shapes day by day all kind of good and bad things also changes very quickly with new tricks...

  5. I wonder what would happen to the Banks if they needed another bail-out? Would the tax payers be so willing to assist them knowning that once they got the bail-outs that they would turn around and mess over the tax payers once more?

  6. In times when people are working hard to Pay off Debt that has already accumulated over the past such frauds add salt to their wounds. Many organized gangs work with sophisticated gizmos to get their way through the credit/ debit card numbers.