What is Credit Card Skimming?

Skimming is generally defined as capturing magnetic stripe data by swiping a legitimate Card through a small hand-held device. The captured card data can then be used to re-emboss and/or re-encode fraudulent cards with "real" data. Each year millions of dollars in fraudulent charges are attributed to skimming.

Anyone in your business who handles credit card transactions.

An employee accepts a customer's credit card for a legitimate transaction. In addition to processing the transaction, the employee also runs the credit card through a device that retrieves and stores credit card data from the card's magnetic stripe. The customer has no idea the card has been copied until unauthorized charges begin to appear on their credit card statements.

Any situation in which the card is out of the Cardmember's sight offers the potential for skimming. Examples of industries that may be the most vulnerable are restaurants and gas stations; however skimming is by no means limited to these businesses.

An increase in cases involving the theft of credit card numbers, by dishonest employees who sell this information to criminal fraud rings, is on the rise. Often these individuals are convicted, and the bad publicity of such cases has adversely impacted the business of the merchants, who are otherwise very reputable.

1.\tKnow your employees. Do background checks before hiring, to be sure the people handling credit card sales are trustworthy. These criminals often target new employees to be recruited as accomplices, since a new employee may not be aware of this illegal activity. For this reason, be sure to educate new employees about skimming and other forms of card fraud.

2.\tBe suspicious of any device which is not part of your normal business activities. A skimming device, known as a "wedge" is a small hand-held device that can read the magnetic strip on credit cards and store that information for later retrieval. It looks like a credit card scanner, only smaller.

3.\tObserve your employees' actions. Pay particular attention to suspicious or secretive behavior.

4.\tBe waryof a non-employee, who comes into your establishment to visit an employee. This could be the outside contact person coming to pick up a skimming device or to pay-off your employee.

5.\tManagement should pay attention to help ensure confidentiality of customers' information. Review the important guidelines with employees on a regular basis and during meetings, to ensure understanding and compliance.

6.\tContact the police, your credit card processor and card companies as soon as possible if you suspect a skimming operation is going on at your place of business. Do not try to apprehend or challenge the employee or an outside contact person. The police may be able to shut down the entire skimming operation without putting you, your employees or your customers at risk.

Skimming is a crime which affects Cardmembers and merchants alike. Cardmembers, unaware that their critical information has been stolen, will discover the unauthorized charges only after the criminals are long gone. And skimming is yet another method by which fraudulent cards are brought into circulation.

Criminals involved in skimming will seek out the employees and businesses that are most vulnerable. By training your staff and making them aware that this criminal activity will not be tolerated, you can help protect yourself, your business and your customers.