One of the most popular credit card fraud schemes right now is called “credit card skimming”, and you the business owner can help stop it. But what is skimming? Credit card skimming encompasses a variety of fraudulent activity centered around one common factor: the way the information was acquired. Credit card skimming is the theft of credit card information from an otherwise legitimate transaction. Credit card skimming can be as simple as photocopying credit card numbers or writing information down to complex electronic devices.
The majority of skimming is done through “skimming” devices— which are small electronic devices designed to copy credit card information that can later be uploaded and printed onto a fraudulent card. This is where you, the business owner, can help limit credit card skimming. Credit card skimming schemes usually rely upon the credit card being separated from the user. For example, a common example of skimming is done by waiters/waitresses who swipe the card in a different location than in front of the customer. Another example happens often in retail: an employee will have to take the card to a different terminal (which has a skimmer) based on a variety of reasons. As a business owner, if credit card skimming is tied back to your establishment, your bottom line could be greatly effected in addition to possible criminal liability.
These techniques have evolved as well. Skimming devices have been created to take information from gas pumps and ATMs. Recently, several ATM skimmers have been discovered nationwide (so be careful)! For banks, most schemes involve installing a skimmer on top of the card reader or keypad.
But how can a business owner prevent skimming schemes from happening at their establishment? First, the business owner needs to be diligent. Make sure that those who process transactions do so in front of the customer and with the customer’s permission. If a card needs to be taken out of the customer’s sight, make sure a manager is watching the employee. This is in no way a slight towards your employee— if anything you are ensuring that there is a witness to your employee properly handling the customer’s credit card. Secondly, shifting your transactions to EMV compliant will decline the overall possibility of fraudulent activity. EMV creates a unique transaction code per transaction— rendering skimming methods ineffective. If you are a bank, make sure to inspect your ATM machines regularly and look for any changes in the structure of the ATM card reading device or pinpad.
Credit Card Skimming is extremely difficult for the card holder to prevent or defend itself. That’s why the business owner can be the consumer’s greatest ally in combatting credit card skimming schemes. Make sure to be diligent about preventing this fraud in order to avoid unnecessary liability or negative publicity.
If your business needs an EMV compliant solution, contact us today at Cynergy Data Texas.