You can be an unknowing and unwilling participant in your own identity theft scam. Each time you use your credit or debit card at a payment terminal, you face the possible risk of having your financial data stolen. And if it is stolen, the thieves can make unauthorized purchases on your account. The surreptitious device that facilitates the theft of your data is known as a card skimmer.
What Is a Card Skimmer?
Card skimmers are small electronic devices that someone illegally attaches to the card reader at a payment terminal such as an ATM or a gas pump. Skimmers may be externally mounted or internally affixed to a card terminal.
- External skimmers attach to the outside of the card reader, where they may or may not be easily detected. They may awkwardly protrude or even feel loose if they’re not properly fitted. Skimmers may even be made of a different material or color than other card readers at the same place of business.
- Internal skimmers escape notice to the casual observer because they are installed inside the card reader. They may be attached to the internal card reader board, the main board or the communication cable.
How Do Card Skimming Devices Work?
Card skimming devices electronically read the encoded information that’s contained in the magnetic strip on the back of your credit or debit card. When you swipe or insert your card in the card reader to pay the merchant for your purchase, the payment terminal “reads” your information from the card. At the same time, an installed skimmer also captures this information and stores it until the thief who installed the device retrieves this data.
When the criminal (who is sometimes referred to as a "skimmer") retrieves the stolen data from a skimmer device, he may use wireless technology to download the data onto his laptop or mobile device, where he can easily transmit it to a network of other criminals who buy and sell this data worldwide. For example, your data may be stolen in Atlanta, Georgia from the gas pump where you paid for gas with your debit card, but unauthorized charges may be made against your card from someone in Paris, France.
Can Credit Card Skimmers Read Chips?
Although credit card skimmers are easily able to read the data on a card’s magnetic stripe, they have a tougher time hacking into an EMV chip-embedded card. EMV is an acronym for Europay®, MasterCard® and Visa®, which represents the worldwide standard for chip-based technology in payment cards. These “chips” are microchips, embedded in a credit or debit card and contain the same data as formerly encrypted in the magnetic stripe on the back of your payment card. Although chip-embedded cards offer greater protection against skimming technology, they’re not completely hack-proof.
Data theft technology is keeping up with the shift toward using EMV cards by producing "shimmers," an improved version of skimmers. Shimmers are extremely thin devices that are placed inside card readers. When you insert your chip-embedded card inside a shimmer-modified card reader, the shimmer device can steal your encrypted data from the chip just as a skimmer lifts data from a magnetic strip.
Tips to Protect Against Card Skimming
The Federal Trade Commission offers these tips to help protect consumers against card skimming:
- Look carefully at each card reader you use. Does it show signs of tampering? Is it loose? Or does it look different from other readers at the same place of business? For example, in a line of gas pumps, does one card reader look markedly different from the others?
- If possible, purchase gas at a station that uses security seals. These seals are placed over the cabinet panel, and if the panel is opened, it activates the label to show the word “void.”
- Wiggle the card reader. If it moves, don’t use it.
- Check your account statements regularly. If you identify any unauthorized charges, contact your banker or lender.
- If possible, pay with cash on the weekends instead of using your card. Thieves typically install skimmers on Saturdays and Sundays so they can steal data and make purchases on cards while banks and other financial institutions are closed.
- Federal Trade Commission: Avoid Skimmers at the Pump
- Georgia Department of Law: Credit Card Skimming
- Wisconsin Department of Agriculture, Trade and Consumer Protection
- Consumer Reports: Watch Your Debit and Credit Cards - Thieves Get Craftier with Skimmers
- U.S. Small Business Administration: EMV and NFC - The Migration to New and More Secure Payment Technologies
- Federal Trade Commission. "Watch Out For Card Skimming at the Gas Pump." Accessed Feb. 4, 2020.
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.