The use of card skimmers to steal others’ bank cards is on the rise across the United States. A study by FICO (Fair, Isaac and Co.), a financial data analysis company, found that in 2022, incidents of bank ATM account information leaks accounted for less than 20% of such crimes, increasing to 35% by 2023.
Last year, over 3,500 banking institutions in the U.S. were affected by such crimes, with a confirmed 315,000 stolen bank cards, compared to 161,000 in 2022, representing a 96% year-on-year increase.
California stands out as the hotspot for card data theft crimes, representing over 20% of total cases in the U.S.
This past Tuesday (July 9), six foreign residents in California were charged by federal court for installing skimming devices on ATM machines or retail store POS terminals in at least six states to obtain debit or credit card information, and subsequently using this information to steal cash or make purchases from victims’ bank accounts.
The indictment states that these six individuals, four from Romania and one each from Ireland and the UK, operated as a group, with five residing in Orange County and one in Los Angeles. They face charges including conspiracy to commit access device fraud, bank fraud, and aggravated identity theft.
Investigators have recovered skimming devices from 22 retail locations in Rhode Island, Virginia, Maryland, New Jersey, and New York. Security cameras at these stores captured the individuals tampering with checkout devices either alone or in collaboration.
In October of last year, the Bristol Police Department in Rhode Island traced a skimming device found on a local bank’s ATM to its source, identifying the modus operandi of two males from surveillance footage and photos provided by the bank. Subsequent investigation by the Department of Homeland Security revealed one of the individuals had committed offenses in multiple locations.
In addition to California, the top five states in the U.S. affected by such crimes include Texas, Colorado, New Jersey, and Pennsylvania. The cumulative number of cases in these five states accounts for nearly half of all incidents nationwide. Following closely behind are Ohio, Florida, Illinois, New York, and Virginia. Reports of losses by cardholders in these ten states make up 70% of all reports in the U.S.
FICO’s report indicates that this type of crime is still on the rise. According to a blog post by FICO’s Vice President of Products, Debbie Cobb, and recommendations on the United Credit Union website, users should observe certain rules to prevent fraud every time they use a debit or payment card:
1. Before swiping a card, check the card reader for any abnormalities. If the card reader appears loose, damaged, irregular in shape, or has color discrepancies, avoid using it. Compare with nearby machines and check for features like a soft keyboard, difficult-to-press keys, or a thick keyboard. At gas stations, inspect the seal on the card reader for any signs of tampering.
2. Exercise extra caution when using non-bank ATMs. FICO’s report reveals that 60% of card skimming incidents occur on privately owned ATMs, often located in convenience stores, bars, restaurants, and grocery stores.
3. Use contactless payment methods to avoid exposing the card’s magnetic stripe information, preventing criminals from stealing sensitive data.
4. If contactless payment is not available, use chip-insertion method and enter a PIN, which is more secure than swiping. Cover the keypad when entering the PIN to prevent camera-based theft.
5. Swiping a card is the least secure payment method as it exposes all card information; strive to avoid it. If encountering issues with contactless or PIN-entry payments, find an alternative transaction location. When refueling at gas stations, opt for in-store payment if unsure of machine safety.
6. Regularly monitor your bank accounts. A bank employee advises customers seeking advice that many bank staff habitually check their accounts every morning out of concern for security. With advancing technology, daily monitoring can help mitigate losses promptly.
7. Set up alerts for your payment cards to prevent fraudulent transactions. Configure text message notifications requiring verification for every transaction to safeguard against card misuse.
These precautions outlined by FICO and the United Credit Union can aid in safeguarding users against card skimming and other forms of fraud.