A waiter at TGI Fridays in Laurel, Maryland was charged in a 16-count indictment with copying and selling the numbers of 73 credit cards used at the restaurant. The suspect, Brian Adams, is believed to have used a device that copies credit card numbers in a crime known as skimming. He is not alone. Skimming is an increasingly common form of credit card fraud that is exploding in California.
Skimming is the theft of credit card information that occurs during an otherwise legitimate credit card transaction. Machines are used, some handheld, that swipe the card and record the information located in the magnetic strip. Some individuals use the numbers themselves to make illegal purchases. Others sell the information on the internet. Adams is suspected of selling the numbers rather than using them himself. The information is used to make cloned credit cards which are used to make purchases.
The waiter was caught when he made the mistake of skimming credit card numbers from two Secret Service employees, who noticed fraudulent charges on their credit cards after eating at the restaurant. They contacted the Field Office in Baltimore, which launched an investigation eventually implicating Adams.
One way Adams may have sold the credit card information is through online chat rooms. Credit card and personal information can be purchased for as little as $1 to up to $20. The cost is determined by factors such as the type of credit card, the amount of information that is sold with it, and the total number of cards purchased. The more cards purchased, the cheaper the price becomes for the purchaser.
The stolen credit card information can be used to make purchases or to create and sell counterfeit cards. According to Transaction World, an estimated $2,000 is charged on skimmed cards before the illegal transactions are discovered.
Locally, credit card skimming has been most visible at gas station pumps from Redondo Beach to Riverside. Last summer, the FBI and the Los Angeles County Sheriff’s Office broke up a large credit card skimming ring that had set up skimming devices on over 60 gas station pumps throughout the San Fernando Valley. Authorities estimate that over 40,000 people were impacting by the skimming operation and the total losses exceeded $4.5 million dollars.
California has one of the highest skimming case rates in the U.S. at 26 percent. While 25 states currently have no law specifically prohibiting credit card skimming, California Penal Code Section 502.6 provides as punishment, “Any person who possesses and uses a scanning and/or re-encoding device with the intent to defraud will be guilty of a misdemeanor punishable by no more than one year in county jail and/or a fine not in excess of $1,000.”
To protect yourself against skimming, check your credit card and bank statements regularly and be cautious of where you swipe your card. If you have doubts, go inside and pay at the counter, making sure you do not lose sight of your credit card. Also, set up fraud alerts at your bank.