#1 fraud threat facing financial services is card skimming, says U.S. Attorney0
Fraud continues to be growing problem in the United States. While many other regions of the globe have reduced counterfeit card fraud over the past decade, the U.S. continues to see fraud rise, and some have called U.S. card skimming an “epidemic.” The scale and importance of the problem has even reached the desk of the U.S. state attorneys. Earlier this week, Steve Wiggington, U.S. Attorney for the Southern District of Illinois, said in an interview with Tracy Kitten that identity theft linked to card skimming is the “number one fraud threat facing financial services institutions as well as consumers.”
“The ability to get your identity and access your bank or credit card account is the most basic threat, and is the one we see substantial growth in,” Wiggington said in the interview. “There are all of these devices now that individuals can put into a gas pump and a service station or into your ATM that can steal your information.”
The most popular skimming locations are restaurants, fuel pumps, and ATMs, which accounted for 46 percent of skimming incidents in 2012. ATMs and fuel pumps receive high card traffic, are unattended and make great hiding places for skimmers. At restaurants, people are accustomed to their card being charged out of sight, making it easy for an employee to run it through a skimmer.
To reduce this fraud, Wiggington said partnerships and communication between banking, law enforcement and retail communities are key.
- An EMV card has a tamper-proof chip that stores and transmits information securely
- The card, cardholder and the transaction all need to be authorized in order for it to be processed, and if even one of them is declined, the whole transaction is declined
- Even if scammers can steal the account data from a card, the data will be useless since every EMV transaction carries unique data to each transaction and can only be generated by the card’s EMV chip
Forming partnerships and increasing communications amongst stakeholders, as Wiggington suggests, together with the ongoing migration to EMV chip payments, just could bring card skimming fraud in the US to an end.