Consumers who use credit and debit cards for everything—even $3 purchases—enjoy a quick and easy shopping experience, rewards points and greater accounting of their spending.
But convenience has its risks: Point-of-sale purchases, as well as ATM transactions, put shoppers and their financial accounts at risk for skimming—a pervasive form of identity theft that costs U.S. banks nearly $1 billion annually.
Most Americans aren’t aware of the skimming dangers we face every day. Skimming happens when criminals attach a hidden device to capture account information and PINs. Your identity and accounts are in jeopardy any time you use your credit or debit card to:
- Get cash
- Pay at the gas pump
- Rent movies at a kiosk, like Redbox
- Buy train tickets
- Check in for a flight
- Pay a taxi fare
- Pay at a parking meter
- Rent a public locker
- Swipe your card through a wireless, handheld POS device—often used in restaurants for table-side payment or in crowded computer stores
- Use ATMs or other machines that are outside a bank or business, or far from watchful eyes
How does skimming work?
Whether it's at an ATM or on a POS device, skimming is essentially the same: A criminal attaches a disguised device to capture your account information and your PIN. There are usually two components to the scheme. The skimming device itself looks remarkably authentic and is affixed over the card reader to collect the information on the magnetic stripe. When you swipe or insert your card, you’re running it through the skimmer as well as the machine. Your PIN is recorded either by a keypad overlay, which tracks every number entered, or, at ATMs, by a hidden camera. (For photos and further explanations of skimming technology, click here.)
So how do you protect yourself, with nearly three million ATMs worldwide (about 400,000 of those in the U.S.) and new POS possibilities arriving daily?
- As in all things, let common sense—and your gut—prevail. If you see any adhesive residue on a machine, or if any part of it looks crooked, loose, scratched, cracked or otherwise tampered with, use a different machine.
- Sometimes low-tech is the best tech. As you type in your PIN, cover the keypad with your other hand. If there’s a camera, you’ll block its view.
- Big Brother is your friend. Always choose an ATM that's inside the bank or as close to watchful eyes as possible. These kiosks are less likely to be targeted by thieves, who need access to the machines.
- Familiarity breeds safety. Try to use the same machine all the time so you’ll notice if it's been altered.
- Keep an eye on your card if a waiter or other employee takes it. Did they swipe twice or go somewhere other than the register?
- If you make a POS purchase, check your bank account for the transaction. Highly advanced new skimmers look and function just like wireless POS devices, even printing a receipt.
- If you notice something fishy, don’t be a hero. Skimmers are usually installed and removed within a few hours, and often the perpetrator is watching the machine. Don’t try to remove the device yourself. Cancel your transaction, walk away and call authorities. (This will also prevent you from being falsely accused of being a criminal mastermind.)