What is a Credit Card Cloning or Skimming?

As technology improves the quality of life everywhere, new frauds and malpractices are always around the corner. Credit card cloning or skimming is a fraud perpetrated on unsuspecting cardholders the world over. This is a however, a relatively new practice in the history of credit card frauds.

Cloning the credit card is defined as copying information off of a credit card and imprinting it onto a bogus card which can then be used to make purchases. While credit card theft by itself is not new, the way the fraud is done is.

Deconstructing the Cloning or Skimming Of Credit Cards

Cloning a credit card requires a little bit of technology and deviousness. The first step of the process is to recruit a person who handles credit cards on a daily basis. From bartenders, waiters, gas attendants — potentially anyone who handles a heavy volume of cards everyday is a target.

The technology used to clone a credit card is a simple, pager sized device on which the card can be swiped. These devices are usually small enough so that they can be carried on the person and can fit easily in a pocket. Swiping the credit card on the device is a simple enough process. It can usually be done without the customer or anybody else noticing. The three digit security number can also be easily transcribed.

Once the credit card is swiped, the information is copied and stored in the memory of the device. Now this information can be copied onto a stolen credit card or a counterfeit card. This entire process is called cloning or skimming of the credit card. It produces virtually an exact duplicate of your credit card which can now be used to make payments on anything.

Protecting Against Credit Card Scams

The easiest way to protect yourself from a credit card scam is to understand how the scam operates. Keep in mind that whenever your credit card is out of sight, it can be a potential for fraud. Most people either do not have the time to scan each entry on their credit card statements or they just ignore it and pay the balance.

Make it a habit to go through the credit card statement every month. Check and double check each entry against purchases made. Be vigilant about your credit card and who you hand it to. Consider using cash to make payments instead of credit cards. If you cannot carry cash, make sure that you are able to see when and where the card is swiped. Be aware that your credit card needs to be swiped only once.

The number one defense against cloning or skimming credit cards is to check the credit card statement each month for unauthorized access.

What You Can Do If You Are A Victim

Victims of credit card fraud rarely if ever find out they were victims in the first place. This is because most people committing the fraud are careful not to use the card up to its full credit limit.

If you suspect that you are a victim of cloning or skimming of credit cards, the first thing to do is to alert the credit card issuer of the stolen credit card information. Call them first and then send them a written report of the theft. A prompt report guarantees that your liability for fraudulent activity does not exceed $50 as per federal law. Make sure that a fraud alert is placed on your card.

File a complaint with local law enforcement and the Federal Trade Commission. Although the FTC usually does not involve itself in credit card frauds unless the amount is over $2000, it is prudent to keep yourself safe.

The final thing to do is to place a freeze on your credit reports by calling all credit reporting bureaus (Equifax, TransUnion, and Experian). Cloning or skimming credit cards is a fraud and it should be reported as such to the credit card bureaus. Freezing credit reports prevents a thief from gaining further access to your credit.