Worried About Credit Card Skimming?

Credit card skimming is problem faced world-wide, accounting for losses of over one-billion dollars a year [1].  In Mexico, skimming can be particularly acute in tourist areas or areas with large numbers of foreign nationals—making San Miguel de Allende a prime target.* 

What is skimming? 
Skimming is the theft of credit card information, typically stolen during an otherwise legitimate credit transaction.  This scam is easy to run – it often occurs when you hand over your credit card to a dishonest employee in a restaurant or bar.  Once the skimmer has your credit card in their possession and out of your immediate view, they are free to “skim” your information.  The skimmer will swipe the credit card with a small machine and use a small keypad to transcribe the 3 or 4-digit card security code that matches up with the magnetic strip. With this information the skimmer is able to produce counterfeit credit cards. 

Other instances of skimming occur where the perpetrator places a device over the card slot of an ATM or credit card terminal.  This device reads and stores the information on the card and is often used in conjunction with a small camera that records the user’s PIN number as it is being typed.  New credit card terminals have been developed to prevent this type of skimming, but the older models are still susceptible. 

What can you do to prevent your card from being skimmed?  Here are some recommendations from credit card experts:

• Always watch waiters and store clerks who handle your credit card – it is best not to let them out of your line of vision; if you are concerned about letting go of your card at restaurants, use cash instead.
  
• Regularly check your accounts via web or phone to ensure no unauthorized use of your credit card has occurred.  Very careful monitoring of each transaction should occur – some thieves take out small amounts in hopes the cardholder won’t notice.
  
• Remember that your credit card is like cash and should be treated as such.  Don’t leave it unprotected!
  
• Shred unwanted financial solicitations and put your mail on hold when you leave town. This will not help with skimming, but it can help with other forms of identity theft.
  
• Request that credit bureaus monitor your accounts for unusual spending patterns and require them to notify you before new credit can be granted in your name. These services come at a price; normally under $100 per year depending on the credit agency. But that might be a worthy investment, especially if you eat in restaurants on a regular basis.
  
• Under no circumstances provide anyone with your credit card PIN, especially over the phone. Only provide personal information when you are sure you know who you are talking to and there is good reason to provide it.
  
• Shred old receipts and credit card bills. And be sure they are completely destroyed.
  
• Use your hand or body to shield your passcode when you are conducting transactions at an automated teller machine (ATM) or at a point-of-sale terminal.
  
• Be alert. If someone is watching you or makes you feel uncomfortable, cancel the transaction and use a different machine.

What should you do if your credit card is skimmed?

• Immediately report the incident to the card issuer.  Once you report the incident, you are no longer responsible for unauthorized charges made on your card.
  
• In the U.S., credit card fraud can be reported to the Federal Trade Commission (FTC).  It is the standing policy of the FTC not to investigate reports where the value of fraud does not exceed $2000. Local law enforcement may or may not further investigate a credit card fraud, depending on the amount, type of fraud, and where the fraud originated from.
  
• Call the police. Local law enforcement may or may not further investigate credit card fraud, depending on the amount, type of fraud, and where the fraud originated from.  If local law enforcement is willing, make a police report and hang on to the police report number.
  
• Contact the three major credit bureaus -- TransUnion, Equifax and Experian -- to request a security freeze, which prevents new credit authorizations without your consent. Brewer suggests visiting the Web site www.annualcreditreport.com. By law, you are entitled to receive one free credit report each year from each of the three major credit bureaus and can obtain a report at www.annualcreditreport.com.
  

Other articles about skimming:

• Skimming the cash out of your account, bankrate.com
• Is Your Credit Card Being Skimmed?, cbsnews.com
• Plastic criminals: credit card thieves make a killing in Mexico's finer restaurants, allbusiness.com
• A New Credit-Card Scam, time.com
• Card thieves 'skimming' pay-at-the-pump customers, creditcards.com

References:

[1] Protecting your debit and credit cards frmo skimming, Vancity.com 

[2] Credit Card Skimming by Michael Russel

[3] Skimming 101: How to spot it, avoid it, deal with it, creditcard.com

*Please note that this article does not reflect U.S. policy, but is simply meant to provide advice to those affected by skimming and to those to wish to avoid becoming a victim of skimming.