Crooks Prey on Unsuspecting Credit Card Customers

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Claims of lost or stolen credit cards go up by nearly 20% during the holiday season, according to PNC Bank. The reasons are twofold: We tend to use our cards more during this time of year, and thieves are smart enough to know that people tend to be rushed and distracted during this time of year. But some criminals don’t wait until the mall starts piping in Christmas music to take advantage of unsuspecting consumers. Could your account information be at risk? “When you hand over your card to a machine or a person, someone can copy the information,” says security expert Chris E. McGoey. In two recent cases, that’s exactly what happened.

Media outlets in New York City reported that a trio of technically sophisticated, brazen crooks installed skimming devices at ATMs within Chase bank branches in Manhattan. The skimmers surreptitiously recorded the magnetic strips on users’ cards, and a tiny “pinhole camera” near the keypad recorded their PIN entries. Before they were caught, the thieves ran up more than a quarter of a million dollars in false charges. The Bulgarian natives who committed the crimes had a ring of fraud that stretched from Canada to Arizona.

(MORE: Study: Your Card Info Is At Risk)

In another alarming case of well-organized identity theft with big-ticket consequences, a ring of fraudsters operated out of high-end steakhouses in the New York City metro area. Law enforcement indicted 28 people and said at least 50 had been victims, according to the New York Times. When these customers dropped a card (like the American Express black card) that appeared to have a very high credit limit or no pre-set spending limit at all into the folder with their check, the thieves used handheld skimmers to record the magnetic strip information. The customer would get back their card never knowing it had been compromised.

The crooks then took the stolen data and created fake credit cards with this information and went shopping. Over the course of a year and a half, this crime ring made more than $1 million in illegal purchases, including fine wine, designer handbags and jewelry. Authorities also seized $1.2 million in ill-gotten cash when they made the bust.

(MORE: Oh, the Irony: Identity Theft Prosecutor Is Hacked)

“That was a very well thought-out, well organized ring,” says Steve Schwartz, executive vice president of consumer services, at Intersections Inc., a security company. “There’s not a lot you can do there” to avoid having your card skimmed, he says.

Mark Ford, a consumer credit and debit expert at PNC, says that in addition to the usual precautions like making sure you get your card back after a transaction and not giving out your PIN to anyone, you’re better off if you can see the transaction take place, which prevents anyone from swiping your card through a handheld skimmer without your knowledge. Unfortunately, this isn’t standard procedure at most restaurants in the U.S.

“Pay close attention to your bank statements,” says Schwartz. It’s a fairly common trick for credit thieves to use the card to make a tiny purchase of a dollar or less just to see if you’ll catch it. If you don’t, the shopping spree is on — using your identity. “People don’t notice,” Schwartz says. “They say, ‘Oh yeah, I must have gone to the gas station.'” The bottom line should be to question any unfamiliar charge with your bank.