Wednesday, September 29, 2010

Pay-At-Pump Skimming Scam Viral, Very Lucrative

Banking security experts say the rip-offs happen one of two ways.

You roll up to an ATM, put your card in the slot, wait awhile and then a funny thing happens. The machine tells you it's out of order and returns your card.

In the second scenario, one that is very common on the eastern seaboard and catching on from coast to coast, you are in a hurry at the gas pumps. You don't want to go inside and wait in line, so you just use your card, credit or debit, fill the tank, and cruise.

You may have just gotten scammed by a skimmer.

Here's how they operate.

By inserting a small device in the scanner, a wafer thin plastic chip with a magnetic strip, they are able to subvert the process of reading your card's magnetic strip, debiting your account and selling you the gasoline or dispensing the cash. These devices are cheap, easily obtained from crooked manufacturers overseas and can be installed in a matter of seconds.

Now your bank account number, your social security number, name and address are stored and waiting for the skimmer to come along to service the scanner you just used. It's probably just one on his route of many such locations, often serviced by gangs that operate as companies under legitimate sounding corporate names.

ATM's and pay-at-the-pump card scanners store information from the magnetic strip on the cards they have processed for a certain period – until other information crowds the signals off the chip. Skimmers take advantage of that, pull into stations and use a WiFi connection to vacuum the cyphers off the machine, and then go on their merry way.

What is next?

It's hard to tell. What was stolen is useful in so many ways. They have been known to set up phony credit accounts, apply for driver's licenses, create new false identities based on the one they just stole and re-sell them to illegal aliens, people on the run – literally, anyone with a need to travel light and on your dime.
In another scenario, skimmers make a new magnetic strip from the information they stole off your card, put it on top of the old magnetic strip from a gift card, discarded bank card or debit account card. Then they use scanners that may be accessed without a clerk seeing the card and noticing that it's a completely different card from the kind the magnetic strip indicates.

Gangsters either hit your account for hundreds of dollars a day, buy merchandise and re-sell it for cash, or just add a certain percentage on the bill so they can bleed you a little more tomorrow without your noticing.

U.S. Attorneys and state prosecutors are filing more cases for this type of theft with every month that goes by.

The private cops who work for banks say these operations are more like a company than a gang; their level of sophistication is just that organized and adapted to the cash flow that hums through the cybernetic world on a moment-to-moment basis.

What to do?

Use cash, they say. Though the technology is available to curb these thefts, merchants at filling stations and ATM terminals are reluctant to invest. It's a new cure for a new problem. To stay ahead of the curve on a fail-safe basis, return to the world of Federal Reserve notes, get a receipt and forego the seeming convenience of cybernetic marketing and accounting.

Here is how sophisticated these operations often become.

In a case of massive identity theft, the U.S. Attorney for New Jersey recently announced the arrests of 53 suspects charged with a sophisticated fraud scheme.

Park Criminal Enterprises, based in Bergen County, New Jersey, bought Social Security numbers of Asian immigrants and re-sold them in the form of completely new identities or to thieves who used them to obtain credit, buy and re-sell merchandise, or scam the system for cash. Sang-Hyun Park bought social security numbers with a 568 prefix, the one typically issued to people from China or American territories in Guam, American Samoa, and Saipan.

They simply had their software sort the day's skimming routes for the desired prefix, culled them out and processed them. Why? Recent immigrants often don't trust banks, cops, or anyone else. They keep their mouths shut and try not to make the same mistake again. That makes them easy pickings for the criminal gangs.

A former lead prosecutor who worked an earlier case and is now a top cop for a technology solutions practice told newsmen that he has never seen anything like it. “What they were able to do by just stealing Social Security numbers is frightening,” said Kim Peretti.

Using cash only might be too dangerous, impossible at times, or just plain inconvenient. How do you deal with the problem?

If anything like this happens, such as a balky machine that suddenly tells you it's out of order or you get withdrawals from your account that you know you didn't make, cancel your ATM card or credit card, get an temporary card and go on about your business.

The card you just cancelled is then put on a hot list and the banking cops wait for someone to try to use it. One man so arrested in Massachusetts was recently jailed and held on a $5 million bond.

The skimming strips are readily available to those who wish to shop for them. Illicit manufacturers produce the devices in mideastern countries and other spots around the globe, market them on the internet and have large customer bases.

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