This is a subject that involves the use of computers and the web, and having had a relative just get stung by these procedures, I thought I would post an e-mail I recently sent to friends and relatives.


CREDIT CARD FRAUD:

May 25, 2002


Just a timely reminder about keeping a close eye on your credit cards, especially any debit card you may have!  

My sister and brother-in-law were "skimmed" this past week, of over a $1000, from their checking account.  They've never used their debit card for any purchases on the web, and it's never been out of their sight.... EXCEPT for those times when they paid their restaurant check with it, and the waiter/waitress took it to a register to make the transaction.  This is no doubt when the theft took place, by the use of a small pocket scanner that records all the data from the magnetic strip into it.  Once this info is obtained, any old credit card, hotel/motel key card, even those game credit cards that arcades and casinos use, can have this info recorded onto it, and thus function as a valid debit card.

Remember, there is no PIN number required to use a debit card as a 'credit card'.  However, unlike credit cards, there is NO protection from theft.  With a true credit card, you are only liable for the first $50 of theft, but with a debit card, the account balance is the limit.  Although most debit cards do have a limit to the amount that can be charged on it per day, it takes several days before you will realize that it has been misused -  usually when you go to use it, and it's rejected for insufficient funds.  This, needless to say, is enough time for the culprits to clean your account out.  

PROTECT YOUR DEBIT CARD!!!!  

If you must use it at a restaurant, insist that you accompany the waiter/waitress to the register with the card to make the transaction, otherwise, use a standard credit card.  Also, never leave the signed stub on the table.  Insist that the waiter/waitress wait for you to sign it, then take it with them immediately.  Many establishments no longer print the entire card number on the check, but some still do, and the expiration date is almost always printed on it, too.  This is all that's needed for someone that picks up the slip while walking by the table, to misuse your account.

Although web transactions are extremely safe as long as your info is entered on a SECURE WEB PAGE (one that shows a small yellow lock in the lower right area of your browser), it's also wise to never use a debit card on here, either.  In fact, keep a credit card account with a small limit, perhaps $500, strictly for this purpose.  That way you have the $50 liability limit for misuse, and it protects the issuer of the card from higher loss which usually results in higher interest fees.

Generally, most web theft is done by SITE CLONING (or Spoofing).  Fraudsters clone an entire site or just the pages from which you place your order.  Customers think they're dealing with the legitimate merchant, but they have been redirected to the fraudulent site during the transaction process.  The spoofed site mimics the completion of the purchase—including sending an order confirmation via e-mail.

Also, there are FALSE MERCHANT SITES.  These are usually porn sites set up solely for the purpose of capturing personal data.  On such sites, the owner asks for credit card numbers purportedly for access to paid content areas or as proof of age.  However, the fraudulent site never actually charges the consumer's account for the content, making it that much more difficult to trace the charges back to the wrongdoers.

Finally, it's possible to MAKE YOUR OWN CREDIT CARD ONLINE. Anyone can download credit card account generators.  These programs derive from the Luhn formula - the same formula credit card companies use to generate 13- to 16-digit card numbers.  The first four or six digits are a bank's identification number, and the last digit (called a check digit) verifies that the formula adds up.  From just one legitimate credit card number, these account generators can produce as many as 999 usable numbers.

In this age of 'plastic', it's very easy to become complacent about these handy little cards, but a bit of diligence and common sense can prevent what could be a large dent to your finances.

Posted by jimholly: May 25 2002, 10:24 pm

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This is a subject that involves the use of computers and the web, and having had a relative just get stung by these procedures, I thought I would post an e-mail I recently sent to friends and relatives.


CREDIT CARD FRAUD:

May 25, 2002


Just a timely reminder about keeping a close eye on your credit cards, especially any debit card you may have!

My sister and brother-in-law were "skimmed" this past week, of over a $1000, from their checking account. They've never used their debit card for any purchases on the web, and it's never been out of their sight.... EXCEPT for those times when they paid their restaurant check with it, and the waiter/waitress took it to a register to make the transaction. This is no doubt when the theft took place, by the use of a small pocket scanner that records all the data from the magnetic strip into it. Once this info is obtained, any old credit card, hotel/motel key card, even those game credit cards that arcades and casinos use, can have this info recorded onto it, and thus function as a valid debit card.

Remember, there is no PIN number required to use a debit card as a 'credit card'. However, unlike credit cards, there is NO protection from theft. With a true credit card, you are only liable for the first $50 of theft, but with a debit card, the account balance is the limit. Although most debit cards do have a limit to the amount that can be charged on it per day, it takes several days before you will realize that it has been misused - usually when you go to use it, and it's rejected for insufficient funds. This, needless to say, is enough time for the culprits to clean your account out.

PROTECT YOUR DEBIT CARD!!!!

If you must use it at a restaurant, insist that you accompany the waiter/waitress to the register with the card to make the transaction, otherwise, use a standard credit card. Also, never leave the signed stub on the table. Insist that the waiter/waitress wait for you to sign it, then take it with them immediately. Many establishments no longer print the entire card number on the check, but some still do, and the expiration date is almost always printed on it, too. This is all that's needed for someone that picks up the slip while walking by the table, to misuse your account.

Although web transactions are extremely safe as long as your info is entered on a SECURE WEB PAGE (one that shows a small yellow lock in the lower right area of your browser), it's also wise to never use a debit card on here, either. In fact, keep a credit card account with a small limit, perhaps $500, strictly for this purpose. That way you have the $50 liability limit for misuse, and it protects the issuer of the card from higher loss which usually results in higher interest fees.

Generally, most web theft is done by SITE CLONING (or Spoofing). Fraudsters clone an entire site or just the pages from which you place your order. Customers think they're dealing with the legitimate merchant, but they have been redirected to the fraudulent site during the transaction process. The spoofed site mimics the completion of the purchase—including sending an order confirmation via e-mail.

Also, there are FALSE MERCHANT SITES. These are usually porn sites set up solely for the purpose of capturing personal data. On such sites, the owner asks for credit card numbers purportedly for access to paid content areas or as proof of age. However, the fraudulent site never actually charges the consumer's account for the content, making it that much more difficult to trace the charges back to the wrongdoers.

Finally, it's possible to MAKE YOUR OWN CREDIT CARD ONLINE. Anyone can download credit card account generators. These programs derive from the Luhn formula - the same formula credit card companies use to generate 13- to 16-digit card numbers. The first four or six digits are a bank's identification number, and the last digit (called a check digit) verifies that the formula adds up. From just one legitimate credit card number, these account generators can produce as many as 999 usable numbers.

In this age of 'plastic', it's very easy to become complacent about these handy little cards, but a bit of diligence and common sense can prevent what could be a large dent to your finances.