Skimming Scams

Sophisticated skimming devices and techniques are making malicious ATMs and rigged Point of Sale machines increasingly common

Today’s fast-paced and consumer-oriented world has become dependent on plastic money to an impressive degree. The days of standing in a long queue at the bank or carrying wallets bulging with cash, though completely over, have-to a large extent-been reduced due to the credit/debit card culture that now prevails among this generation of consumers. These cards relieve consumers from carrying large amounts of cash that previously made them potential mugging targets. However, criminals, as they say, go where the money is-and fraud, designed specifically to steal credit/debit card information, is now increasing at an alarming rate in Pakistan and abroad. The local public, in general, is an easy target for this type of fraud, mainly because of high credit card usage, coupled with a general lack of awareness. This gives criminals the opportunity to defraud without getting caught. It is only after the card owners have used their credit/debit card, or gone through their bank statements, that they notice unauthorized transaction-a likely sign that their card has been compromised via skimming attack.

Skimmer:

Skimming is the act of stealing credit card information to counterfeit credit cards or make purchases using that information. It involves an unauthorized device-called a skimmer-acting as a card reader placed over ATM card slots or Point of Sales (PoS) machines. The device then steals the data contained in the magnetic strip in credit/debit cards as they pass through the over skimmer. 

As the magnetic strip contains all the sensitive data present on the card, stealing this information essentially allows criminals to create fake copies of the original card for the purpose of committing unauthorized transactions. In case of ATM or debit cards, the criminals also require the user’s Personal Identification Number (PIN) code, without which the fake copy (of the card) cannot be used to withdraw cash. The attainment of the PIN code is usually accomplished by placing a small camera nearby, which records the actions of the user as he enters the PIN code into the machine, or alternatively via a fake keypad which is overlaid on the original ATM keypad. The stolen PIN codes are transmitted wirelessly to the criminals. Consumers targeted by skimming frauds can potentially have their entire bank accounts emptied or their credit cards maxed out in a short period of time- both of which can be a traumatic experience. Additionally, they have to bear the trouble of coordinating with their financial institution to sort out the damage done as a result of this identity theft. On the other hand , banks or merchants whose machines are used to carry out the theft have to bear serious reputation damage, as the general public often tends to conclude that the organization failed to protect the consumer’s card data.