Beware of Credit Card Skimmers

When you are making a credit card transaction, you probably assume that your credit card is in safe hands. However, it is not always so. Beware of skimming! It is a more direct version of an identity theft. The skimmers try to illegally copy the information from the magnetic strip on the back of your credit card. Once they have skimmed your plastic, they can download the information onto a computer and create a fake or 'cloned' credit card with your data on it. Then the scammers are able to withdraw money from your account.

Skimming attacks are a new form of credit card frauds. There are two ways how they can take place. In the first one a skimmer puts a small device over the card slot of a public cash machine (ATM) which reads the magnetic strip. These devices are often used together with a pinhole camera which records the cardholder's PIN. With both the magnetic strip and the PIN there is nothing that can prevent skimmers from making a duplicate of your debit or credit card.

The second way of skimming is more widely spread. Skimmers find temporary work at such places as restaurants, hotels or retail businesses. When you pay, for example, for your meal, they slide your plastic through a little electronic device that can be easily hidden in a hand. The device copies all the information on the magnetic strip. It takes seconds to swipe a card through a skimmer and steal the information.

Either way, you won't find out that skimming has taken place until you receive your monthly credit card statement and notice the unauthorized charges. Here are some useful tips to keep in mind. They will help you protect the credit card information from skimming and other types of credit card frauds:

• Keep your eye on your plastic while it is being processed.
• Do not share your PIN with anyone. Do not keep any written copy of your PIN with the credit card.

• Make sure that the clerk gives your plastic back to you. When it is returned, check that it is really yours.
• Never leave your credit cards lying around in the open.
• Obtain a copy of your credit report on a regular basis from all the three major credit bureaus and check for any fraudulent transactions.
• If you are using an ATM, take the time to check that there is nothing suspicious about the machine.

Credit companies can fairly easily detect skimming. They keep a list of all credit card holders who have complained about fraudulent activities. If they see that there were a lot of complaints about the particular merchant, they can investigate their terminals. The penalties for merchants who do not ensure the physical security of their terminals can be severe. They range from large fines to complete exclusion from the banking system. It can be a death blow to such businesses as restaurants or cafes because they rely on credit card processing.

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