Card Fraudsters Suspend High-Tech Breaches for More Old-School Methods

Posted: 2010-06-08 00:00:00

One of the attractive benefits of skimming for fraudsters is not only the millions of dollars that they can get away with, but that the process is cheap maintains Karen Postma, TMG (The Members Group), in her latest fraud white paper, "A Throw Back Threat."

"High-profile data breaches achieved through high-tech thievery have been grabbing headlines steadily over the past five years, forcing criminals to dream up new and more devious ways to steal valuable information," says Postma, TMG Card Risk senior manager.

"Skimming, however, is a proven, relatively inexpensive way to grab small amounts of data over a very short period of time. A criminal with access to a couple thousand dollars and an Internet connection can procure a skimming device within a week, maybe less."

An old-time favorite, skimming is achieved when a fraudster places a look-alike device over the card slot of an ATM or gas pump. Enabled to read the magnetic strip as credit, debit and prepaid cards pass through; the device is often used in conjunction with a pinhole camera able to pick up a cardholder's PIN as he or she types it into the keypad. This allows the criminal access to the code before the PIN pad has an opportunity to encrypt it.

The second installment of TMG's three-part mini-series of white papers on fraud, "A Throw Back Threat", takes a look at skimming's comeback and some tricks-of-the-trade to help financial institutions combat this foe.

"Staying on top of the latest and greatest in fraud tools and technologies is a must, of course. But, so too is keeping your eye on the mainstays of crime," says Postma.

"A Throw-Back Threat," can be downloaded at http://www.themembersgroup.com/fraud2/.

To wrap-up this series, in coming weeks Postma will unravel how "Card Fraudsters Get Tricky with Travel."

About TMG

TMG is a wholly-owned subsidiary of the Affiliates Management Company, which is owned by Iowa credit unions and their members. As a financial and credit union service organization (CUSO), TMG is dedicated to providing innovative and flexible card processing and payment solutions to credit unions and financial institutions across North America. TMG's core products include credit, debit, ATM and a variety of prepaid solutions, as well as online reporting, ACH and ALM services. TMG's prepaid card products are branded ATIRA. For more information, visit www.TheMembersGroup.com.