The problem with magnetic strips on credit and debit cards was that they could be cloned, swiping all card and account information along with the strip. Chipcards were issued to stop this.
Each transaction is a unique code so the theory was that even if it could be cloned the code would be useless because it could never be used again. Con artists began low tech by removing chips from cards using heat and attaching them to other cards. However, they couldn’t do this unless they got their hands on cards. Now, they’re back at POS and ATM slots with even higher tech than before.
Here’s how it works:
Crooks attach what is called a shimmer to ATM and point of sale (POS) slots. It’s a fake card reader that harvests info. When you insert your card into the slot, it clones the info from the transaction. Some shimmers are just microchip technology that fits right in the card slot and can be inserted by the crook with their card while they are paying for something and removed just as simply as it was inserted. Yes, shimmers can be in literally any chip reading device.
But wait. If every transaction is a unique code, what good does cloning the transaction off the chip do at all?
Along with the transaction code, there is account information embedded in the chip that crooks use to generate a magnetic strip that can be used pretty much anywhere today. Most retailers still have magnetic strip readers that crooks can use the card made from the information gleaned and repurposed off your chipcard.
How can you protect yourself from this threat? The best advice I can give you is to keep your card in your wallet as much as possible, use contactless options, and deal with actual people.
Many cards now offer tap-and-go features. If you don’t insert your card, a shim can’t get you. There are smartphone payment apps you can use instead of taking out your card. When you go to withdraw money from a bank account, go inside and use the human teller.
If you do need to use an ATM, use one inside of a bank because these are more heavily guarded and inspected regularly. If you need to use a POS device, use a credit card or credit option rather than debit because this kind of transaction does not link directly to your bank account info. You will give them less to work with when they go to try to make a magnetic strip based on the info they cloned off your chipcard.
Always monitor your account activity and keep track of what you spend and where. If you notice anything suspicious on your account, alert your bank or credit card company immediately.
