Unfortunately, horror stories of people losing significant amounts of money due to credit card skimming in India are commonplace. Be it big cities like Mumbai or small towns like Bhopal, financial cybercrime is on the rise.
Credit card skimming is a form of theft where a device gets used to steal personal information from credit cards. This blog explores what credit card skimming is, how it works, and the potential consequences for cardholders. It also discusses the security measures implemented in chip-based cards and tips for preventing credit card skimming.
Credit card skimming is the equivalent of robbery, in which the perpetrator uses a skimmer to steal a credit card's personal information. A skimmer is a device that clones the card information for later use.
In the case of skimming, each piece of information on the credit card's magnetic stripe is stolen and stored by the skimmer — as it is swiped through the machine. The cardholder's full name, card number, and expiration date of the card are all stored in this stripe. Credit card skimming lets criminals make purchases, steal money off accounts, and trade card information to outside parties for similar uses.
Once the card skimmer has obtained your card's information, fraudsters can:
It occurs when the thief creates false accounts or applies for a loan in your name using your personal details and credit card information.
The skimmer can use the stolen information to make online or in-store purchases. A theft like this is called a 'card-not-present' fraud.
It is possible for the information to be shared with other parties and to be copied onto counterfeit credit cards.
Theoretically, yes. But it takes a little longer for the information on the chip to be cloned. Chips store encrypted information, while magstripes are easier to clone and can be scanned in one swipe. All major card companies like MasterCard, Visa and RuPay are now phasing out magstripe cards in favour of chip-based cards as a security measure.
This is a cautionary list. It is not intended to insinuate that petrol pumps, restaurants, or other commercial establishments voluntarily indulge in skimming activities.
Some credit card machines and ATMs, within petrol pumps, may have credit card skimmers permanently installed. Creating counterfeit credit cards or even stealing money from the cardholder’s account is possible. Although not technically skimming, a small camera close to the ATM could capture your PIN as you punch it into the machine.
Shops and restaurants may use credit card skimmers too. Especially along interstate highways — where most people take quick pit stops on a long journey. Again, there’s no way to tell the honest ones from the frauds, but good to be on your guard generally.
Shoulder surfing is where the fraudster observes the card user punching in the code while posing as someone else waiting to use the machine.
Generally, credit card skimmers get integrated into an ATM or POS machine. Unfortunately, these devices may be hard to distinguish. You can be pretty confident that a credit card skimmer has already been installed on the device — if it appears that an additional part is attached to the card reader or that a portion protrudes oddly.
That said, here are some other ways to use your credit card that are more secure and may prevent fraud:
Most cards issued today by card companies, banks, and other financial authorities are mandatorily chip-based.
EMV (or Europay, Mastercard, Visa) chip cards have greater security than magnetic stripe cards. Magnetic strips store information on a one-time basis, meaning the information on the stripe is not rewritten. EMV chips, on the other hand, hold an encrypted code that dynamically changes with every transaction. This digital signature is hard to copy and renders the data virtually impossible to replicate or steal without going undetected.
You can tell if your card can make contactless payments by looking for a wi-fi-like icon on the card. The icon will be printed on the card next to the chip, indicating that you can tap the card on the POS device (card machine) and pay. Aside from the fact that contactless cards don’t need to be inserted into the device to authenticate the transaction, the data transmitted by the RFID embedded in your card is as secure as the chip that your card comes with.
However, until the issuer alerts you about the fraudulent transactions, you might not even know that a credit card has been skimmed — so it's always best to remain alert.
Credit card skimming poses a significant risk to cardholders, as it allows criminals to steal personal information and engage in fraudulent activities. While chip-based cards offer enhanced security compared to magnetic stripe cards, they are not entirely immune to skimming.
Be vigilant when using credit cards at petrol stations, ATMs, retail outlets, and restaurants where criminals may install skimming devices. Utilising chip cards and contactless payment methods can provide additional protection against skimming. If you suspect your credit card has been skimmed, contacting your credit card issuer immediately is crucial — to report the fraud and block any unauthorised use.
The compromised credit card reader hardware typically covers an existing, real ATM or payment equipment. The fake reader gathers and transmits payment card data for the thief to retrieve. PINs can be obtained using a covert camera or a keypad overlay.
Yes, anyone who uses a credit card at ATMs, petrol stations, restaurants, or retail outlets is susceptible to theft via credit card skimming.
If your card has been skimmed, you will likely receive an official message about unwanted transactions. It is always important to monitor your accounts regularly.
Yes, a card skimmer placed in an ATM, or a retail checkout, can record your PIN and other crucial details of your card. It's best to check for tampering, oddly placed cameras, and small recorders to watch for the same.
Yes, chip cards can be skimmed as well. However, this is a fairly lengthy process and is comparatively rare. This is because chips store encrypted information, while magstripes are easier to clone in a single swipe.
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