The use of plastic has revolutionized the way we handle our finances today. Debit cards and credit cards help us do transactions of withdrawal and deposit in just a few seconds; and purchase goods and services instantly. Such things that save our time are a boon in our fast paced lives. But a number of fraudulent activities have also been linked to the use of the cards, which may overshadow its advantages. One must be aware of these frauds and take precautions so that they can be avoided.
One such fraud is credit card skimming. If you ever scan through your card statement and find charges or cash withdrawals that you did not make, don’t just think that the credit card company did a mistake. You could be a victim of Credit card Skimming.
What is credit card skimming?
In this type of fraud the fraudsters fixes a small electronic device called the skimmer in the ATMs or machines that merchant establishments use to swipe the card. As the user unknowingly passes the card through the slot, the skimmer captures the card information from its magnetic strip. This data is copied onto another blank credit or debit card and then used to make purchases or withdraw money. Miniature cameras or keypad overlays are used in conjunction to get the PIN at the same time. The camera captures the PIN as the customer enters it on the keypad. A keypad overlay lines up with the buttons of legitimate keypad to record the keystrokes when the PIN is entered.
Effects of Credit card skimming fraud
- The fraudster can use the cloned card for making purchases online or offline. Victims will be unaware of this theft until they find charges on their account or money withdrawn from the account. Victims are caught by surprise as their card has not been stolen, still used to charge expenses without their knowledge.
- If the thief rings up high balances in your name, and the amount gets unpaid then it will be turned to a collection agency. When an account goes into collection, the derogatory remark finds its way in the credit report and affects the score negatively. One can file a lawsuit, but one will have to establish that he or she has been the victim of identity theft. One will have to bear the legal costs involved and also spend time and energy to fight such cases.
- The thieves that make a duplicate card usually max out the credit limit quickly. They know that very soon the victim will get to know of the fraud. So they want to take the maximum benefit in as little time as possible. Maxed out cards also lead to low CIBIL score.
- Credit card skimming is also done to commit identity theft. Herein the personal details of the victim are used to borrow loans from banks. Since the fraudster has no intention of paying the loan back, defaults on payment affect the credit history of the victim. His credit report shows non-payment of loan EMIs and leads to a low CIBIL score.
What to do if you become a victim of Credit Card Skimming?
If you find anything suspicious in your credit card statement, immediately get in touch with the card issuer and get the card blocked. If you can guess where the skimmer is installed provide the location and address, so that the card company can take necessary measures to prevent future frauds.
How to avoid credit card skimming
- Ensure that the card is always swiped in your presence be it restaurants, shops or petrol pumps. Be vigilant. Take a close look to detect any tampering before swiping the card. For example a card reader that sticks out too much, or is loose can be a skimmer. Do not swipe your card in a slot in case it looks odd or suspicious.
- Get EVM chip based cards which are more secure. Even if your card is skimmed, the chip won’t be duplicated and you will not be responsible for any transaction made on the duplicate card without the chip.
- Keep a close watch on the transactions that appear on the credit card statement. If you find any charges that you don’t recognize do not ignore them.