Anti-skimming task force formed
by Ernie Davitt, National Affairs Editor, ASM
NSW Police have formed a special strike force to combat an upsurge in credit card fraud focusing on ‘skimming’, which saw one operation steal over $50 million from customer accounts earlier this year.
Fraud Squad police believe the latest skimming operation involved criminals tampering with an EFTPOS machine to install the hardware needed to ‘skim’ data from credit cards.
The crime has resulted in fresh warnings from the banking industry that retailers and customers need to be vigilant and to work with their banks to try to combat skimming.
Credit card skimming is generally considered to be the process by which legitimate credit card data is illegally captured or copied from the electronic strip on cards, usually by electronic means.
Bankers say a range of activities can constitute, or are closely related to, credit card skimming. Although the term is often used, many of these activities are not limited to credit cards – ‘skimming’ card details at ATMs or EFTPOS terminals, or intercepting data transmitted from EFTPOS terminals, can be used to target debit cards as well.
It is possible that in the future, as the use of ‘stored value’ cards increases, these cards may also be susceptible to ‘skimming’ or related activities.
Australian banks have a vested interest in combating the practice. As the owner of the credit card is rarely liable for the fraudulent transactions, the true victims of credit card skimming and related fraud are the banks, financial institutions and/or credit card companies.
Ultimately the community pays through high banking costs. The owner of the credit card can also suffer from adverse credit profiles, the inconvenience of identifying the fraudulent transactions and replacing the stolen cards and information and, on occasion, getting stranded away from home without any money.
The Australian Bankers’ Association (ABA) is assuring customers they are not liable for unauthorised transactions on their accounts when they become victims of skimming crimes.
NSW Police have advised banks and other financial institutions that they have formed Strike Force Wigg to investigate the use of skimming devices used to defraud customer accounts in NSW.
David Bell, Chief Executive of the ABA, said: “When skimming is suspected, banks will conduct an investigation and funds are restored to customers – the innocent victims of this crime. In other words, the bank wears the loss.”
“Banks are assisting NSW Police with information on these crimes and are working together to protect customers. We are pleased that NSW Police have made some arrests and we are hoping they secure convictions for these crimes.
“Banks take security seriously and have computer systems in place to constantly monitor transactions. If a transaction is identified as suspicious, it will be investigated to ensure there is no breach of security.
“If a bank suspects fraudulent activity, customers’ cards may be blocked to ensure fraudulent transactions cannot continue. In addition, a bank staff member may contact the customer to discuss any unusual activity, such as the card being used overseas when it is usually used domestically.”
Mr Bell added: “We urge people who notice unauthorised transactions on their statement to report this to their bank as soon as possible. If you have any concerns, you can check your account online, over the phone or by dropping into a branch.”
“It’s also a good idea to ensure that customers keep their bank updated on any change in their contact details such as mobile, home or work phone numbers and if travelling overseas, they should let their bank know.”
In addition to the protection provided by bank security measures, bank customers can take simple precautions to protect themselves against card skimming:
- Always be careful to shield your PIN when using an ATM or EFTPOS terminal. Use a free hand to cover the key pad while you enter your PIN.
- You should treat your card like it is cash and make sure you never lose sight of it. If possible, don’t give your card to a waiter or shop assistant and let them walk out of your sight.
- Be vigilant in checking your statements. Always report any unauthorised or suspicious transactions billed to your account and contact your bank immediately, even if the unauthorised transaction is a very small amount.
- Make it a priority to get your card back after completing a purchase. Sometimes cards are intentionally retained by salespeople in order to later commit fraud.