Credit Card Skimming Rising In The US Bankrate.com May 29 2002 : Losses to credit card skimming exceed USD 1 billion per year, and occur "anywhere credit cards are put into a point-of-sale database", due to transparent technology, says Brian Marr, of the US Secret Service. A skimmer acts "as a net [in taking] information off the card", Marr explains, and traps data from hundreds of credit cards, to "be downloaded into a computer and e-mailed anywhere in the world". In the past three years, skimmers have shrunk in size and are widely available online, whereas criminals previously "had to make a skimmer [themselves]", says Lou Struett, of Magtek, a manufacturer of mag-stripe card readers.
Card skimming is a big problem in Europe, Asia and Latin America, with Hypercom's George Wallner noting, "a Far East factory will do as many as 5,000 cards a night, and the next day those cards are in a suitcase on the way to Europe". Skimmers are available online from USD 300, and equipment to make a counterfeit credit card costs USD 5,000 to USD 10,000, and thieves can also slip a 'skimming bug' into an older credit card terminal, to retrieve the card data a few days later. In the US, a scam ring surfaced in April, in which two waitresses at an Orlando restaurant sold credit card data to a crime ring in Miami. In a separate, "atypical" case, Hampton police charged an individual with credit card theft for opening a series of fake businesses and respective bank accounts. The man "also obtained a POS terminal" and "hundreds of credit card numbers", the Daily Press reports, "and in the evening, he would sit down and rack up sales with these businesses through this POS terminal, putting those sales into his accounts". Next day, he would "go around the different banks ...and withdraw funds against these sales", some of which exceeded USD 50,000 in one day, but the sharing of data by five different banks led to his arrest. The major credit card firms, and technology vendors, are addressing the issue of skimming with new procedures and products designed to minimize the risk of card fraud. Migrating to chip-based cards under the EMV initiative will eliminate many of the problems associated with the cloning of payment data from a mag-stripe card, while the upgrading of POS terminals to accept chip-based transactions, eliminates the risk of terminals being 'bugged'. Gartner analyst, Jeff Roster, also believes that if POS terminals, such as Trintech's eVia terminal, are brought to tables in restaurants, the overall rate of skimming would drop.
