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What is Credit Card Skimming?

    If you’ve been keeping up with the news, you’re well aware of the term “skimming.” It’s often used to explain the means by which identity thieves obtained someone’s credit card information – but the term isn’t usually explained in detail. Knowing how to avoid becoming a victim of such a practice is much easier when you understand what you’re facing. Today, we’re going to take a look at what skimming really is, and how you can keep it from happening to you.

    How does it work?

    Skimming a credit card and using it to make fraudulent purchases is actually a complicated process, but it begins with a device that the criminal uses to capture a card’s information. These skimming devices are often attached to gas pumps or kept behind the counter of a store or restaurant and physically used by a crooked clerk or server.

    Skimmers can be installed as fake keypads on an ATM or installed as a video camera or even use an entire phantom ATM. The fraudsters goal is to get your PIN from your card and the information from the magnetic strip.

    The device “skims” the information from the card, but that’s just the beginning. The person who skims the card then sells the card information to another party who will them produce counterfeit credit cards with the data. Skimming criminals will typically sell this data in bulk, in files that contain hundreds or thousands of peoples’ data.

    It can take a while before this process is finished and someone uses your stolen information, and you won’t have the slightest clue it’s happened until your statement shows up.

    So how do I prevent it?

    • First and foremost, use caution when paying at the pump. Gas pumps are notorious for concealing hidden skimmers.

    • Don’t let your card out of your sight. This is especially important at bars and restaurants, where a large portion of ID theft takes place.  This is becoming less common with portable point of sale payment devices coming right to your table.

    • Make a habit of reading your statements thoroughly every month. Sometimes the only way to find out you’ve been targeted for identity theft is by finding fraudulent charges on your statement. If you don’t look for suspicious activity, it could go on for some time without you knowing.

    What is Vishing?

    Vishing is one of the newest methods of credit card fraud with the help of a phone call with direct voice contact.  This is how it works.

    The cardholder gets an unwanted phone call supposedly from your Bank representative and asks you to provide personal confidential information over the phone. This information is further used by criminals in order to use your credit card and good name for their profit.

    What is Phishing?

    Another popular method of credit card fraud is Phishing. The essence of this method is the substitution of real bank forms, notices, letters or email for fake forms in order to get your personal information including your bank login, password or other details about you and your credit card.

    One of the most common forms of Phishing on the Internet is the creation of the exact copy of your bank’s website login page where you enter your personal data in order to be authorized into your account.  Please remember that even Bank employees do not know and are not allowed to ask about your personal PIN.

    Unfortunately fraud is more rampant than ever.  Remember that your vigilance will significantly reduce the chances of fraud with your credit card.


    Christopher - BSc, MBA

    With over two decades of combined Big 5 Banking and Agency experience, Christopher launched Underbanked® to cut through the noise and complexity of financial information. Christopher has an MBA degree from McMaster University and BSc. from Western University in Canada.

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