What is Skimming?

Skimming is a fraudulent activity involving the unauthorized capture of credit or debit card information. It typically occurs when someone uses a device called a skimmer to collect data from a card’s magnetic strip or chip without the cardholder’s knowledge. This stolen information can then be used to create counterfeit cards or for other fraudulent purposes. What makes skimmers so dangerous is they have the appearance of a legitimate device.

Financial companies have implemented several measures to combat card skimming and protect customers from fraud. Here are some of the actions taken by financial institutions:

1. Enhanced card security: Financial companies have introduced more secure card technologies to combat skimming. Many institutions have migrated from magnetic stripe cards to chip-enabled cards (EMV technology). EMV cards contain embedded microchips that generate unique transaction codes, making it difficult for fraudsters to clone or counterfeit the card.
2. Point-of-sale (POS) security: Financial companies work closely with merchants to ensure the safety of payment terminals and point-of-sale systems. They provide guidelines and standards for implementing secure terminals, such as point-to-point encryption (P2PE) and tamper-evident features. Regular inspection and monitoring of merchant locations are conducted to identify any signs of tampering.
3. Fraud detection and monitoring systems: Financial institutions employ sophisticated fraud detection and monitoring systems to identify suspicious transactions and patterns. These systems use advanced algorithms to analyze card usage patterns and detect anomalies indicative of skimming or fraudulent activities. Unusual or high-risk transactions can trigger alerts, allowing immediate investigation and potentially blocking compromised cards.
4. Real-time transaction monitoring: Financial companies monitor transactions in real-time, enabling them to identify and respond quickly to suspicious activity. Automated systems analyze transaction data, including location, amount, and frequency, to detect irregularities or deviations from the customer’s typical behavior. If suspicious activity is detected, the financial institution can proactively contact the customer to verify the transaction’s legitimacy.
5. Two-factor authentication: Financial companies have implemented additional layers of security through two-factor authentication (2FA) or multi-factor authentication (MFA). This tactic requires customers to provide additional verification, such as a one-time password (OTP) sent to their registered mobile device and card information. This extra step adds another level of security to prevent unauthorized access or use of the card.
6. Education and customer awareness: Financial institutions actively educate their customers about card skimming risks and guide how to detect and report potential incidents. They offer resources, such as online security tips, videos, and articles, to raise awareness and promote safe card usage practices.
7. Collaboration with law enforcement: Financial companies collaborate with law enforcement agencies to share information, intelligence, and expertise in combating skimming and other financial crimes. This collaboration helps identify criminal networks, coordinate investigations, and take legal action against perpetrators.

These are just a few examples of the measures that financial institutions take to fight card skimming. Their efforts involve technology, fraud prevention strategies, customer education, and collaboration with various stakeholders to safeguard their customers’ financial information.

Consumers can take several precautions to avoid falling victim to credit card skimming:

1. Inspect card readers: Before using an ATM or a payment terminal, inspect the card reader for any signs of tampering. Look for loose parts, unusual attachments, or anything out of place. Criminals often install skimming devices over legitimate card readers, so be vigilant and report any suspicions to the establishment or the authorities.
2. Use secure payment terminals: Use ATMs in well-lit, high-traffic areas. Choose payment terminals installed in reputable credit unions, stores, or other trusted locations. Fraudsters are more likely to target standalone ATMs, lesser-known machines, and gas pumps furthest from the store attendants.
3. Shield your PIN: When entering your PIN at an ATM or payment terminal, shield the keypad with your hand or body to prevent hidden cameras or onlookers from capturing your personal identification number. This step ensures that your PIN remains secure even if your card details are compromised.
4. Be cautious of unusual devices or overlays: Some skimming devices may appear as overlays on top of the keypad or card slot. If something feels off or looks different, avoid using that machine and report it to the appropriate authorities.
5. Check your account regularly: Review your credit card and income statements for unauthorized transactions. If you notice anything suspicious, report it to your financial institution immediately. Prompt action can help mitigate potential damage.
6. Sign up for card activity alerts: Use Alert U to notify you of transactions being made using your cards. Immediately report any unrecognized activity that occurs.
7. Use contactless payment methods: Consider contactless payment methods, such as tap-and-go cards or mobile payment options like Apple Pay or Google Pay. These methods use encrypted data and are generally more secure than traditional card swipes.
8. Update and secure your devices: Keep your mobile devices, computers, and other devices updated with the latest security patches and antivirus software. This step helps protect against malware or phishing attempts that may compromise your financial information.
9. Use credit monitoring services: Consider subscribing to credit monitoring services that alert you to suspicious activity or changes in your credit report. These services can provide extra protection and help you detect potential fraud early. Champions First Credit Union makes credit monitoring easy through your online banking portal.

By adopting these precautions, consumers can reduce the risk of falling victim to credit card skimming and protect their financial information.

If you find a card skimmer, report it to the local authorities and the establishment where you found it. They can take the necessary steps to investigate and remove it. Additionally, inform your bank or credit card provider so they can monitor your accounts for any suspicious activity.