It’s guest post day here at techsmart.ng and today’s post is from Eran Feinstein – Enjoy & Share!
Crooks are stealing credit card data in record numbers and then using the stolen information with merchants across the world. To reduce the risk that you will fall prey to chargebacks from consumers who have been defrauded, it is important to understand the cloning technologies employed by the crooks.
Credit card fraud prevention starts with understanding the tactics used by the crooks.
Almost 20 percent of credit card or ATM card users have been victims of card fraud, according to StatisticsBrain.com. Contributing to this growing rate is the advent of a new way of obtaining card details. Credit card “cloning” or “skimming” is the process in which a criminal illegally steals the details on cards, then puts that data on a bogus card and uses it. Though seemingly sophisticated, this approach is becoming all too common.
To clone a credit card, all that is required is a small, handheld cloning device, which can easily be concealed in a thief’s pocket. Now imagine for a moment the ill intentions of many today; a store clerk or a gas station attendant can easily tell a customer that the card needs to be swiped behind the counter because the customer-facing card swiper is not working. A customer then hands the employee a card so it can be run through the register swiper. However, at the same time, unbeknownst to the customer, the clerk could also pull out his own cloning device scanner and run the card through that as well. Just like that, the card cloning device gets all of the card’s details.
The employee (or his network) could then easily produce a cloned card and use it at will; while all charges go to the innocent customer’s account.
This can happen anywhere a card is physically exposed. For example, when giving a card to a waitress or a bartender, the card could be at risk.
According to Consumer Reports, “Criminals running skimming operations have been improving the technology they use to make stealing card data even easier, so card issuers and gas station owners need to step up their game to fight back.”
Cloning at ATMs
At ATMs, the cloning process becomes even more sophisticated, as thieves can actually capture PINs as well as card information. This involves the use of a fake card swiper, a bogus keypad overlay, and sometimes even a hidden camera.
“The hidden camera and keypad overlay are interchangeable devices because they both are used to record or track your PIN number. The camera records you typing in the number, while the more advanced keypad overlay collects your pin number,” according to Wired.com.
Consumers Must Protect Themselves
Not all people are criminals; in fact, probably a very small percentage of such individuals would ever clone a card, but they could, and it does happen all over the world. Consumers should be conscious of such activity and keep their guard up at all times, whenever they remove a card from their wallet.
Tips to Avoid Fraud
There are a number of precautions consumers can take to minimize the risk of having your card data stolen, including:
- Being vigilant – Remaining aware when handing a card over to anyone. Are they acting strange? Are they pulling something out of their pocket? Always keep a close eye on their behavior.
- Inspect. Inspect. Inspect – Carefully examine the card swiper device at the gas pump or the ATM, for example. Does it look strange? Is it lose when you touch it?Fraudsters will put their device on top of the actual one in an attempt to steal data.Sometimes they’ve done such a good job that the average person would never know the difference. In fact, this data capture approach is, by far, the most common. It accounts for the majority of ATM fraud.Sometimes criminals will be so brazen as to actually affix their own keypad on top of the actual ATM keypad. This device is linked to their fake card swiper and enables them to capture a card PIN as well. Like the card swiper, take the time to inspect any keypad, whether at a gas station, a grocery store, or anywhere else.
This prevents criminals from capturing the number if they are using the camera method.
- Blocking the keypad – Concealing the keypad as best as possible while entering passwords.
Outsmarting the crooks
These are just a few of the many ways consumers can protect themselves from card fraud. The problem is getting worse, not better, and they need to be extremely careful whenever making a payment using a credit or ATM card. To avoid falling victim to fraudsters, consumers need to do everything possible to stop them in their tracks.
What Can a Merchant Do?
Of course, consumers must take responsibility to ensure their cards are not defrauded and report them as soon as they notice anything amiss. But, as a merchant, there are precautions you can take to ensure the cards you accept are not fraudulent. In online sales, track IP addresses, and only ship goods to an address that matches the billing address of the card. Educate yourself about PCI DSS compliance and make sure you adhere to the regulations.
In offline transactions, verify the cardholder’s ID and signature match what is on the card. Check the Hologram and UV logos on the card. And, equally importantly, be on the lookout for strange behavior. If the buyer tries to distract you to take your attention away from the card, or if anything does not seem right, trust your instinct and decline the transaction.
About the Author
Eran Feinstein is the founder of 3G Direct Pay Limited, a global e-commerce and online payments solutions for the travel and related industries. With over 14 years of leading technology, sales, marketing and operation teams Eran is an authority in the East African e-commerce and payments arena. He’s also an avid marathon runner.