Sometimes, skimming can be a good thing. The word means “removing something”: so if you take the whipped cream off of the top of hot chocolate, you’re skimming it!
When someone skims your credit card, it means they’ve removed the information (like card number, expiration date, your name) and they’re about to wipe you out. That’s not a good thing at all. Here’s what you need to know.
Two ways your credit card gets “skimmed”
One way someone can skim your credit card is by attaching a device, hidden to the untrained eye, to an ATM. The device skims each card as it’s entered or swiped, stealing your card’s data. This is virtually undetectable; it could happen to you at any point, and you would be COMPLETELY unaware during the process!
The other way is more common, and can be done with a hand-held skimming device. Unfortunately, these are common and cheap—they are available online for about $60. In fact, they look like a normal credit card reader, and they’re only a little bit larger than an engagement ring box. So someone with a malicious intent could hide one readily and pull it out in a second.
What happens is that the skimmer takes your card, swipes it, and they’re off to the races! This process happens in a matter of SECONDS, and the information is stored in the machine to be downloaded on a computer
How they skipe you
The skimmer is often someone you trust like a server or a bartender who has your card out of sight for a few minutes. Before running your card for the actual payment, the skimmer takes the device out of their pocket and swipes your card. We call this the skipe (skimming + swipe!)
Once they skipe your card, that information is stored, and they’ll return your card to you. Everything seems find, and you’ll never know you’re in trouble.
The skimmer then uploads the information to his or her computer. Now, they can sell it on the black market or get ANOTHER device which lets them write your card’s information to a new magnetic strip and presto—now they’re walking around with YOUR credit card! This concept is similar to how college kids make fake IDs but is much more dangerous to your bank account!
Here’s how to stay safe
The US has been ranked the #1 country most affected by skimming scams! This means that EVERY SINGLE TIME you use your card, your card is at risk of being skiped!
In order to ensure that you recognize right away if this has happened to you, take the following precautions:
- Check your credit frequently; sign up for a credit report service. Now you’ll get an alert sent to you automatically if any changes are made to your credit
- Set up banking alerts for both your computer and your phone so that you can see when a purchase is made. This sounds overwhelming, but you’ll be happy you did if you see an alert that someone has purchased a yacht on your card!
- Set up both written and verbal pass codes; have as many layers as possible and make them as complicated as possible. The more layers, the harder it will be for a skiper to get away with it
- Use CREDIT instead of debit so that hackers can’t wipe out your bank account. If they max out your credit card, you can take your time sorting it out. If they empty your bank account, the situation can quickly become a nightmare
- Review your statements frequently and notify the bank IMMEDIATELY if something looks suspicious!
Or just use cash
The only way to really ensure that this isn’t happening to you is to just use cash. I know, it’s inconvenient, but nobody can skipe a stack of Benjamins!
Other than that, there isn’t much that credit card users can do to prevent skimming from happening. The important thing is that it is caught early, so be sure to follow my tips above!
Things are changing with EMV chips
Skimming and skiping are becoming an epidemic. Thankfully, financial institutions are beginning to adapt to incorporate better measures to protect cardholders.
By late next year, most credit and debit cards will come with a special embedded chip called an EMV chip. This is a technology that has been used in Europe for years.
The new cards with these chips are much harder to reproduce and make skim cards out of. In fact it’s virtually impossible for skimmers to make skim cards out of these.
There will also be new credit card readers that are more secure.
In the meantime, follow my tips to stay safe!
Image credit: Credit Cards by Sean MacEntee (via Flickr)