Tuesday, September 9, 2008

6 Tips to Avoid Becoming a Skimming Victim

Biggest Tip: Shop At Home with HomeATM's Personal Magnetic Stripe PIN Entry Device

Notice: These tips are for bricks and mortar shoppers only.  None of these tips apply when shopping in the safety of your own home with your own personal magnetic card reader and PIN Entry Device, such as the one provided by HomeATM.

Contrary to popular belief, shopping online is safer than venturing into a bricks and mortar establishment and having to worry about POS terminals that have been tampered with, employees who can swipe your card data into hand held magnetic card readers, etc. etc. etc.  Should you feel the need to take a risk and make a purchase in the bricks and vulture, er mortar world, here are some tips designed to reduce your chances of getting skimmed:  

1. Get your card back quickly.  The shorter the time that your card is away from you, the less chance there is of a fraud. Otherwise it can get skimmed, or an employee or other person could take a quick picture of it with a cell phone camera.  I'm not trying to make you paranoid here, I'm just trying to increase awareness.

2. Restaurants Can Eat You Up:  Tell your waiter that you prefer to pay at the register rather than handing him or her your credit card and having them walk away with it unseen.  That way, you're less likely to be subject to skimming, a scam whereby an employee takes an unauthorized scan of your card. If you must hand your card over to a waiter or salesperson, keep the card in your sight at all times.  But I cannot imagine a situation where "you must" hand it over.  Just explain that you are aware how easy it is to skim a card, and "nothing personal" but that "ounce" of prevention sounds good after dinner.

3. Don't Pay at the Pump:  This is a two-fold tip.  First off, skimming devices, such as the one pictured on the right are inserted behind panels at gas pumps.  They cannot be seen by the naked eye.  When you swipe your card, they swipe your card information.  So pay inside and you'll avoid this problem. Gas Pump card swipe technology is very technologically primitive.  You pay enough at the pump, why risk it?  

The second tip regarding the purchase of gasoline is this.  When you pay inside, use your PIN number.  When you pay at the pump, (not only do you risk having your card skimmed) the bank usually places a hold of up to $100 on your account, even if you've only purchased $25 worth of gas.  

So pay inside, and use your PIN.  PIN-based transactions are immediately authorized and only the exact amounts are deducted from your account with no holds.  You also eliminate potential overdraft fees incurred from the bank holds placed on your account, which can last up to 72 hours.  

4. Look for security cameras.  PCI data security standards require merchants who process credit cards in person to have security cameras trained on card processing areas, notes Miller. Unfortunately, many don't, which means the retailer, restaurant or other merchant is more likely to be subject to internal credit card fraud by employees. If employees know that security cameras are monitoring them, they are less likely to try to commit fraud.

5. Beware of tip fraud.   Yeah, I know these are tips to prevent fraud, but don't be coy with me here.  I'm talking about the types of tip fraud where you add a servicer tip onto your credit or debit card charge.  In those circumstances you risk tip fraud, which is a  scam whereby a service employee alters the tip amount when entering the final bill at the cash register or point-of-sale system. 

6. Check for skimming at ATM and PIN entry terminals.  
I've talked a lot about this on the HomeATM PIN Debit Blog recently. Criminals plant skimming devices.  Skimmers frequently attach these devices to ATMs or mini-camera's (see graphic on right) to record PIN numbers, then steal card data encoded on magnetic strips.  Therefore, if an ATM or PIN entry device looks suspect, don't use it, and inform the authorities.

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