Saturday, 20 October 2012

Essay - Credit Card Skimming

The advent of the credit card or e-money has changed the way we were using money. The tyranny of cash is no more there to torment you. It is a high lightened sense of security in the world of uncertainty. Gone are the days when a purchase would have to be postponed because of a cash crunch. But as we know, everything has got two sides. With credit card comes Skimming. Skimming is the unauthorized copying of information of a credit card stored in the magnetic strip. It is used to create a cloned card for making illegal transactions.Instances of Skimming have been reported in ATM, retail shops etc. The sophisticated devices are used along with a miniature camera to read the PIN at the same time. The devices are installed in ATM which is hard to notice. Another technique used is a keypad overlay that is similar to the legitimate keypad below it and presses them when operated, but records or transmits the key log of the PIN entered. The device or group of devices illicitly installed on an ATM is colloquially known as a "skimmer". Now daysCriminals are using ATM skimmers that relay the information via text message eliminating the risk of being caught. In shops, they just have swap through the skimmer to know your card information.
Precautions to be taken;

• Do not pay using credit card in a shop if your card has to be taken out of sight.
• Check the machine used by the shopkeeper.
• If you are suspicious about the card slot on an ATM, report immediately to the concerned officials.
• Check your bank account and credit card statements when you get them.
• If you notice unusual or unauthorised transactions on your account or credit card statement, report it to the bank.

When a customer complained about such incident, the issuer can collect a list of all the cardholders who have complained about fraudulent transactions, and then uses data mining to discover relationships among them like merchants, websites, type of goods etc. For example, if many of the cardholders use a particular merchant, that merchant can be investigated. Algorithms can be written for finding patterns. Merchants must ensure the physical security of their terminals. They should check their workers regularly to avoid such incidents. The penalties for merchants can be severe if they are compromised, ranging from large fines by the issuer to complete ban on business.
Lastly, Be Alert!