Monday, March 16, 2009

Skimming -- What it is and How to Avoid Being a Victim

Skimming is not exactly a new phenomenon, but it continues to make the news in many regions around the country. What it involves is a small bit of elicit technology and some criminal intent on the part retail employees that enables the theft of credit card information. Skimming most frequently occurs at retail outlets that often process credit card payments - particularly bars, restaurants and gas stations. The crime involves a corrupt employee who skims customer credit cards with a small, hand-held electronic device that can read the data on the magnetic strip. The employee usually sells the information through a contact or on the internet, at which point counterfeit cards can then be made. Criminals can then go shopping with a copy of the credit card or debit card with the cardholder unaware of the fraud until a statement arrives showing purchases they did not make or authorize.

How to prevent yourself from becoming a victim?

Closely guard your credit cards - treat them in the same way that you would treat your cash. Try not to let your credit card or debit card out of your sight when making a transaction. Monitor credit card receipts and check them against your statements carefully. If you notice an unfamiliar transaction, contact your bank or credit card issuer immediately. The customer service number is printed on the reverse side of most credit cards and debit cards.

* To further protect yourself from potential unauthorized charges or identity fraud, you can request that credit bureaus monitor your accounts for unusual spending patterns and require them to notify you before new credit can be granted in your name. These services come at a price, normally under $100 per year depending on the credit agency. But, that is definitely cheaper than the ultimate cost of identity theft that can be caused by skimming and might be a good investment if you eat out in restaurants on a regular basis.

What to do if you're a victim of credit card fraud?

As stated above – contact your bank or credit card issuer immediately. If you don't make a report in a reasonable time frame you may be liable for some or all of the unauthorized charges. Another step is to contact one of the three major credit bureaus to request a security freeze to be applied which only allows new credit to be authorized with your express consent.

If your credit card is used fraudulently and you still have the credit card in your possession, you will not be liable to pay for any part of the losses. You would probably still have your card in your possession if you are a victim of card-not-present fraud or if your credit card has been skimmed and a fake version produced. If someone else uses your credit card before you tell your card issuer that it has been lost or stolen, the most you will have to pay, generally, is $50. Fraudulent charges are easier to correct with a credit card (as compared to a debit card) since the money has not been taken out of your personal checking or savings account yet.

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