Minimise the risk of card skimming and counterfeit transactions

Card skimming is a problem for businesses and consumers. The activity involves capturing information from the magnetic stripe of a credit or debit card from an ATM or point-of-sale (POS) terminal to make illegal transactions. 

Unfortunately, while the number of incidents of card skimming fraud is declining, the total losses to consumers totalled over £4.7 million in 2022. And in some cases, consumers never get their money back. 

This article explains how card skimming works and how to reduce risks.

How card skimming works

As mentioned, card skimming involves capturing information from credit and debit cards’ magnetic stripes. This process can occur anywhere that accepts cards, including supermarkets, petrol filling stations, roadside cafés, and cashpoints. 

Criminals perform skimming activities by attaching small devices to payment terminals or cash machines. These capture data from the unsuspecting users’ magnetic stripes and record them in memory for later use.

Some thieves also install cameras on card or cash machines to capture users’ PINs, giving them additional sensitive data to enact fraud. 

For this reason, anyone buying or selling goods or services should be vigilant. Staff, customers, and clients must watch for card-skimming devices and report any incidents to the police. 

What happens if criminals are successful with card skimming? 

If criminals are successful in their card-skimming efforts, two things can happen: 

1. Criminals make unauthorised transactions using a clone of your card 
2. Criminals may max out your credit card, reducing your credit score

Sometimes, you can recover the money. However, it depends on the circumstances. Debit card recoveries are often more challenging than credit card recoveries.

How to reduce card skimming and counterfeit transactions

Fortunately, there are several ways businesses and individuals can reduce the risk of card skimming and falling prey to fraud. 

Check ATMs Before Use

One practical way to reduce the risk of card skimming is to check ATMs before use. Customers can do this every time they withdraw money and companies can perform evaluations in the morning and throughout the day. 

Use Transaction Alerts

Customers can also use alerts to tell them when transactions occur. Online banking tools can send instant notifications if someone uses a card fraudulently, allowing consumers to alert their bank. 

Use A Mobile Wallet

Another option is to allow customers to use mobile wallets, like Google Pay, Apple Pay, and Samsung Pay. These solutions tokenise credit and debit card information, preventing criminals from skimming it from transactions. 

Some ATMs now accept phones for taking out cash, so this practice should be encouraged everywhere. 

Use Contactless Point-Of-Sale (POS) Devices

You can also reduce the risk of card skimming with a contactless USB card reader. These don’t require direct contact with the magnetic strip, reducing the risk of skimming by employees or anyone with access to these devices. 

Provide Inside Payment Or Cash Withdrawals

Another option is to provide indoor payment or cash withdrawals. Exterior machines are at the highest risk.

For instance, if your business operates a petrol forecourt with card readers at the pump, give customers the option to pay inside. It’s more secure and reduces the risk of skimming significantly. 

Likewise, you could move your cash machine inside and secure it with CCTV. Criminals are less likely to tamper with machines if they think there is a chance they could be caught. 

Keep All POS And Cash Machines In Public View

Finally, keep POS and cash machines in public view to reduce counterfeit transactions. Some skimming equipment is hard for criminals to install and takes time. Making card-accepting machines more conspicuous discourages thieves from attempting to place devices because of the risk of being seen. 

What should card skimming victims do? 

Card skimming victims should act quickly to minimise losses and prevent more counterfeit transactions. Here’s what to do: 

Tell The Entity Issuing The Card (Usually The Bank)

The first step is to inform the card issuer. The bank or financial firm can stop the card, preventing criminals from using it in further transactions. 

Report The Card Skimming

Victims should then report the card skimming incident (or counterfeit transactions) to the police. Law enforcement will pass the information to Action Fraud. 

Change Passwords

Finally, victims should change passwords or PINs linked to the skimmed card. This approach reduces the risk of further fraud occurring. 

Keeping Customers’ Money Safe

Businesses and customers are responsible for keeping their money safe from card skimmers. Fortunately, there are numerous strategies they can adopt to reduce risk and prevent financial loss. Adhering to them should keep most people safe.