A new type of fraud: credit card skimmers

Credit card fraud can take many forms, from the low-tech copying of numbers, to the latest and most high-profile means of obtaining customer information: credit card skimmers. Skimmers are small electronic devices which can be inserted inside of ATMs or credit card readers in gas pumps. The scanning components are extremely intricate, made with parts that can be obtained, among other sources, from MP3 players. They are then sometimes put into plastic housings which fit smoothly over legitimate extant card readers, which can be found nearly anywhere.

When cards are scanned, card numbers and other information is recorded, and sent to the scammers through SMS or text messages. Alternately, the thieves may simply return to the card reader at a later time and physically remove the skimmer, and then download the information. Individual cases of skimming may be difficult to detect, but over time, credit card issuers can generally determine which ATM or card reader had the skimmer installed on it.

This method of obtaining credit card information has, thus far, been more prominent in Europe, but cases have been seen in the United States since 2007, with many of the skimmers appearing in California and Washington, as well as on the East Coast. Skimmers may become a more popular means of theft as the knowledge to construct them spreads, since they can already be built cheaply; the cost of parts for a skimmer can be as little as $50-$500.

There is no way to completely protect yourself from skimmers, but you can reduce the chance that you will fall prey to this ingenious new scam tactic. The most effective protection is provided by the card reader manufacturers themselves; new ATMs have digital photos of the proper appearance of the machine as a screen background, so that you can compare these to the machine in front of you.

However, these pictures do not apply to older ATMs or card readers at gas pumps, so simple vigilance is your best defense. Since skimmers cannot be custom built to resemble every ATM and card reader, be on the lookout for misshapen or off-color readers which do not seem to fit in with the rest of the machine. Additionally, by avoiding using card readers in ill-lit areas, you can make sure that you have a good idea of the reader's appearance before you use it.

-Seth Berger