Beware of Skimming

‘Skimming’ is the fastest growing form of fraud in the UK, increasing by 85% up to the end of 2004, according to the Association of Payment Clearing Services, a trade organisation.

Despite the efforts of a specialist police unit called the Dedicated Cheque and Plastic Crime Unit, millions of pounds are still lost each year by unsuspecting victims.

These are the people who have the details of their bankcards or credit cards stolen by criminals, who fit cash machines, or ATMs, with false fronts that read the card’s magnetic strip. A tiny camera records the unsuspecting victim typing in his or her PIN. The card is then ‘cloned’ (counterfeited) by the fraudster and used to empty the victim’s bank account.

Chip and PIN cards were widely introduced in Britain around the beginning of 2005 in the hope that they would help eradicate cash-card crime and fraudulent transactions. The belief being that it is impossible to use a stolen card without the correct four-digit PIN.

However, the chip and PIN system has failed to offer protection from skimming because most ATMs still read cards’ magnetic strips and not the microchip that is much harder to counterfeit.

Cards still have their strips so that they can be used to pay at retailers and businesses that don’t yet have chip-readers. Also, many visitors from other countries have cards with no chips, only magnetic stripes. This makes them more vulnerable not only to ATM fraudsters, but also to dishonest employees of businesses that accept debit cards but don’t have a chip and PIN payment system.

Banks are finally becoming alert to the problem of skimming, and more and more financial organisations are trialling chip-reading cash machines – usually running their tests at or around midnight, when ATM fraudsters are most likely to withdraw their ill-gotten gains without fear of interference from honest members of the public.

Barclays has also made use of special anti-skimming devices that fit over the slots of the bank’s ATMs and prevent criminals’ fake fronts being stuck on. The cash machine is shut down if the anti-skimming gadget detects defrauding technology.

To avoid becoming the victim of skimming:

• Don’t use an ATM if you think it has been tampered with in any way.
• Use your body to shield the keypad when entering your PIN, and don’t allow anyone to distract you.
• Treat your bankcards like cash, keeping them safe about your person and not letting them out of your sight when making a transaction.

If you suspect that you have fallen prey to skimmers:

• Cancel your cards immediately. Your bank or credit card company will operate a 24-hour helpline for this purpose.
• Report your suspicions to the police.
• You will not be liable for transactions made by a cloned card, unless your bank or credit card company can prove that you acted fraudulently or irresponsibly (by, for example, writing your PIN on a slip of paper and keeping it with your card).

For further information see the UK Net Guide feature Chip and PIN Cards, or visit www.cardwatch.org.uk.