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What is Skimming Fraud?

Of late, skimming cases have increased to a great extent. Here, we will understand how this highly sophisticated form of crime works and how you can guard against it.
Ashwini Kulkarni Sule May 13, 2019
Credit cards and ATMs have indeed revolutionized the way financial transactions are carried out. They not only provide you with a convenient gateway to pay your bills or make purchases, but also significantly cut down your transaction time.
You no longer have to battle long lines just to withdraw money from a bank, nor do you need to deal with harried employees at bill payment counters. However, this hi-fi technology has also offered newer avenues for unscrupulous people to conduct nefarious activities.

How Is It Done

Skimming is also referred to as a 'white collar' crime due to its sophisticated nature. Here, the card information is illegitimately obtained and used without the knowledge of the card holder. It can be of various forms depending upon the nature and extent of the crime.
Equity skimming, which involves the investor siphoning equity from the homeowner at the cost of a small down payment, is common in the real estate industry. Credit card and ATM skimming are amongst the most common types of such frauds.
More often than not, these crimes involve sophisticated devices which read protected information from your card and transfer it to the skimmers. However, credit card skimming can also be accomplished with a mere pen and paper.
When you hand over your credit card to a waiter at a restaurant, do you ever think that he could misuse it? Probably not. Though, this is possible. In fact, it is the most popular modus operandi of skimmers. The waiter (or any other conniving person) surreptitiously swipes your card into a skimming device which records all information stored on the card.
Alternatively, he may note down the details with a pen and paper. This information is then used to make a counterfeit card which can be used to make purchases. Credit card frauds are more prevalent at standalone points-of-sale, kiosks, gas stations, and similar places which offer little or no surveillance.
In ATM skimming, mostly hi-tech devices are used for the purpose. Oftentimes, a fake keypad is installed over the real one, which records your keystrokes when you type your PIN. It may also include a compact gadget on the machine slit which reads the information on your card and then transmits it to a skimmer.
This information is used to make a duplicate of your card. Sometimes, a pinhole camera may be installed at innocuous places on the ATM. This camera overlooks the keypad and screen to pick up vital information about your card.

How To Protect Yourself

Skimming frauds are very difficult to detect immediately. This is because most users are unaware about the misuse, since the card never leaves their possession (except for unsuspected brief moments at restaurants, points-of-sale, etc.). To avoid this, keep a close watch on all the transactions where manual handling of your card takes place.
Similarly, try to avoid transactions at unguarded kiosks, gas stations, etc. In case of ATM transactions, choose an ATM located outside a bank, since it is likely to have more security and surveillance. Always check for any unidentifiable objects, devices on the ATM.
If you suspect anything unusual, inform the bank authorities and select a different ATM for your transaction. In case you fall prey to such a crime, make sure you educate yourself about credit card fraud penalties, which may provide you some relief.
Such frauds can be brought to light sooner, if you frequently monitor your account. This will enable the law enforcers to nab the culprits at the earliest.