Credit Card Theft: 4 Ways Information is Stolen

A 2015 Barclays bank study found that 47% of the world’s credit card fraud happens in the U.S., despite the fact that our nation accounts for only 24% of the global credit card volume. However, North America does have the most credit cards per capita, and each cardholder charges roughly $4,000 a year. 

These statistics say two things to credit card thieves: There’s a ton of credit cards to be targeted in the U.S., and the cards are worth targeting because they have relatively high spending limits across the board. As an American, you’re high on the list of credit fraud targets, but how do the thieves who want your credit information get it? According to Bankrate, there are four main ways.

1. Card Skimming Devices

Credit card skimmers are small, flat devices that are a bit thicker than your credit card. Inside the skimmer is a magnetic strip that gathers card information. Information is gathered when the card is slid through the skimmer, just as you would just slide it through a card payment terminal at a supermarket.

The fraudster has to use the skimmer covertly. This is why card skimming is reputed to happen frequently in restaurants. A dishonest server takes your card out of sight, runs it through the skimmer, and then returns the card along with the bill.  

There are two ways to avoid being the victim of of card skimming: Only pay at point-of-sale locations where you can see how you card is handled, or pay with cash instead of plastic anywhere your card would be taken out of sight to process payment.        

2. Decoy Card Terminals

Decoy card terminals look like the real thing — and the fraudsters are fast at making the swap. ATMs and point of sale locations at retailers are the most popular targets, as these terminals receive an exceptionally large volume of card swipes. Decoy card terminals have also been found on gas pump terminals, vending machines, and parking meters. 

Many ATM owners have gone on the offensive by placing special security indicators on ATM terminals to show whether the terminals are tampered with and retailers as well as departments of transportation have anchored card terminals on small, steel platforms that would require a metal saw — and quite a bit of elbow grease — to remove.  

3. Malware on Computers 

Malware is software that runs in the background of your computer for a nefarious purpose. When it comes to credit card theft, malware is deployed in three ways: by downloading to your computer when you visit a site that contains the software, by downloading when you open an email attachment, or by being placed on public computers (e.g. computers in libraries), from which it collects sensitive information when you use email, a bank website, social media, etc.

To protect against this type of fraud, outfit your computer with a software security package that detects malware, don’t enter sensitive information into public computers, and don’t open email attachments from senders you don’t know.

4. Company Server Breaches

Big time credit card thieves like nothing more than breaching a single server that contains thousands if not millions of  credit card account numbers. Consider how many customer records the following breaches of big name companies’ servers put in the hands of fraudsters:

  • EBay — 145 million records
  • Home Depot — 109 million records
  • JP Morgan Chase — 83 million records
  • Michael’s Stores — 3 million records
  • Staples — 1.16 million records
  • Domino’s Pizza — 650,000 records
  • Sony Pictures Entertainment — 47,000 records
  • Target — 40 million records

Consumers can’t do much to avoid these breaches. But one thing certain: The recent uptick in credit card theft though the IT networks of major companies has made them “harden” their IT systems to outside attacks, and implement two-sided firewalls to prevent internal theft. Target, for example, has implemented a new card payment system to bolster customer confidence.

American Eagle Credit Union offers a full line of financial services — including the VISA credit and debit cards with EMV chip technology — to businesses and individuals that have a vast array of financial plans and needs. To inquire about services and membership, please call us today at (800) 325-9905, or send us an email through our contact form.

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