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A card skimmer is a device which is designed to steal information from a card with a magnetic strip, classically a credit card, when the card is used in a legitimate financial transaction. Once collected on the device, the skimmer can be used to make a clone of the card which can be used for fraudulent purposes, or the collected information can be utilized for online and over the phone transactions which do not require a physical credit card, only the information on the card. The annual losses caused by card skimmers are difficult to estimate, but appear to be upwards of $1 billion US Dollars (USD).
There are several ways in which a card skimmer can be used. Some skimmers are designed as standalone units through which a card must be swiped. For example, an unscrupulous restaurant employee might carry a skimmer so that he or she can run a customer's credit card to pay for a tab, and then run the card through the skimmer to collect the information. This type of skimmer can usually store numerous credit card numbers.
The second type of skimmer is a small electronic device which attaches to a credit card terminal or automated teller machine (ATM). In this case, every time a card is swiped or inserted, the skimmer gathers the user's information, and it may be attached to a device which logs keystrokes to collect the personal identity numbers (PINs) of people who use the terminal.
People can protect themselves from credit card skimmers in a number of ways. If a credit card is taken by someone to be run, the card holder can ask to watch the process. Most credit card terminals are kept in plain view, making it easy for people to see if their cards are run twice, or if there is anything unusual about the way in which the card is handled. When asked to enter a PIN, people should also get into the habit of covering their hands while they enter the number, to make it harder to collect the number with the use of a camera or observation.
Standalone credit card terminals with card skimmers may look or behave in a slightly unusual way. For example, the area to insert the card may be loose or crooked, indicating that it has been moved, or that a card skimmer has been attached over the actual area of insertion. People who regularly use the same terminal may also want to note changes in the configuration, which could indicate that a skimmer is being used. Card skimmers are also often accompanied by cameras to log PINs.
If someone believes that he or she has identified a card skimmer, the skimmer should be reported to the fraud department in the company which operates the terminal, and to the police. If, for example, someone notices what looks like a card skimmer on Bank A's ATM, he or she should call Bank A's fraud department with information and notify the police. If someone suspects that a card skimmer is being used by an employee of a business, they should report it to the police and the manager.
Victims of card skimmers will notice unusual activity on their credit cards or bank accounts. This activity should be reported to the credit bureaus and to the bank which administers the card so that the card can be closed and a fraud investigation can be initiated. Card skimmers can also be used to collect information from key cards, government identification cards, and any other sort of card with an embedded magnetic strip, so people should be careful about controlling access to such cards.