How Is Credit Card Skimming Done?

By Author: Alisdair Cosgrove
Total Articles: 184
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This type of credit card scam is easy to run, as it can take place when you give your credit card to a store employee during a simple purchase. Your credit card may not only be swiped at the register to pay for your purchase, it also may be swiped with a little hand-held machine known as a skimmer. The skimmer can retain the information on hundreds of debit and credit cards and then it is used by unscrupulous people to print counterfeit cards.

The skimmer is capable of gathering the information on hundreds of cards; then information is downloaded into a computer to be emailed to skimming rings that are at work worldwide. About ten years ago it was not as easy to accomplish this fraudulent activity as it can be today, because the skimmers were large, bulky machines which had to be hidden under the counter in the store.

The advances in technology in the past ten years, have made it possible to streamline the skimmer and make it small enough to be hand-held and out of sight of the unknowing customer. The ease in which these skimmers can be purchased is in itself criminal, in that the machine used in the skimming ...
... process is offered over the internet for about three hundred dollars, however the machine used to print off the credit cards costs much more, an amount from five thousand to ten thousand dollars.

Another form of skimming is done through the placing of a skimmer bug directly into the credit card terminals and then retrieving it later with credit card information on it. The older credit card terminals are the ones that can be violated with this type of scam, but with the newer terminals this bugging has become much less prevalent.

As soon as the credit card skimmers have confiscated all of the information they need from your card, they will begin to make purchases of their choice with your credit card number. Online shopping has become more and more popular and this is the reason why so much of the credit card fraud is taking place over the internet, because it is very easy for the wrong people to gain access to your credit card information. The cards validity is checked by the information thieves through their purchase of several low cost items from various websites to find out if the card is actually an active one.

The cardholder is one victim of this crime and is responsible for up to fifty dollars on the total amount charged on his card, however, the major victim in all of this is the merchant whose employee did the skimming. The merchant is responsible for payment of the fees for the investigation and he also is held one hundred percent responsible for the skimming activity and risks the loss of the merchandise.

The money used by the credit card companies to offset the cost of investigating charge-back claims by their customers, comes from the investigation fees paid by consumers and businesses.

It is well known by the criminals, who perform these skimming scams, that a purchase of at least $2000 must be made before an investigation is started.
Alisdair Cosgrove is a freelance writer specializing in personal finance. You can read more of his work at www.JSNet.org for credit card comparisons and also offers a comprehensive list of credit cards with low rates.