Though credit and debit cards generally have built-in security features, they may not be foolproof. For example, thieves can steal sensitive information by skimming cards, a technique that helps fraudsters clone cards and use them later for fraudulent transactions.
In 2022, there was more than a 700% year-over-year increase in card skimming, with gas stations ranking as one of the most common locations for skimming devices.1 The FBI estimates that card skimming costs individuals and financial institutions more than $1 billion each year.2
So how does card skimming work, and what steps can individuals take to help avoid it? Learn more about card skimming and potential ways to help safeguard financial information.
To steal information, criminals use card skimming devices that are physically attached to or on card readers, where people insert or swipe their cards to complete a transaction. Common card skimming locations typically include ATMs, point-of-sale (POS) terminals, and fuel pumps.
When a card is swiped or inserted into a compromised machine, the skimmers scan the card’s magnetic strip to steal the card’s information. This information can then be stored and either downloaded or transmitted via Bluetooth, which allows criminals to create copies of the cards later.
As part of the card skimming fraud, criminals may also use fake keypads or install a tiny camera above keypads to record the PIN used for a card.
Once a card has been cloned and the PIN is known, thieves can potentially withdraw funds from ATMs and make purchases. The consequences for affected individuals can be far-reaching. Their bank accounts could be drained, or their credit accounts could be maxed out, which could also affect their credit score.
This makes it critical to closely monitor financial accounts and statements for unusual transactions and dispute unauthorized purchases immediately.
Here are some strategies to consider to potentially help stay protected against card skimming:
There's normally no way to immediately tell if a card has been skimmed. It may only become obvious once thieves start testing card information or committing fraudulent transactions.
As soon as individuals notice suspicious activity within their account, they should contact their financial institution, the Federal Trade Commission, and/or the FBI.2
Individuals who believe their account has been compromised should immediately report any unauthorized transaction to their financial institution. Although each bank may follow a different process, people may expect to take the following steps:
Cardholders may also be able to report fraud and freeze accounts through an app or online account.
Some banks and financial platforms may employ fraud monitoring that catches suspicious activity and alerts cardholders in real-time. They may also proactively block transactions if suspicious activity is detected.
Victims of credit skimming fraud can also report incidents to the FTC. While the FTC can’t necessarily resolve someone’s individual inquiry, they work to investigate large-scale cases of fraud and scams. They may also provide tailored information on how someone can protect their personal and financial information.
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