What is Skimming: Meaning and How It Happens?

What is Skimming
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As the world is getting more digitalised day by day, the internet and online things are getting rooted deeply in the lives of human beings. Whether we talk about travelling, shopping, banking or connecting with family and friends, these things are incomplete without the Internet. One of the alarming frauds these days is skimming. With so many digital transactions and online money transfers, people are not aware of what is skimming and so the potential risks and chances of cyber crimes increase.

In the year 2023, cyber frauds of INR 5,574 crore were reported by National Cybercrime Reporting Portal. It was almost double as compared to the INR 2,296 crore in the financial year 2022. Out of all the cyber frauds and scams, skimming remains the most prevalent and devastating scam that can happen to a person today. Let’s understand all the details about skimming, how it works, and how you can prevent yourself from it.

What is Skimming?

Skimming is a sneaky form of fraud. It’s like when someone secretly takes your money without you even knowing it. It is an act of copying the cardholder’s personal payment information. It is an illegal practice used by identity thieves to capture card information from a cardholder surreptitiously. It is a method used by identity thieves to capture your personal information.

Skimming is also known as a white-collar crime or off-book fraud because here the fraud is done before it enters into the accounting system. Indeed, you heard that right! Cash theft in case of skimming has been done before its entry into the bookkeeping system or company’s accounting records. 

Although skimming is a slang word, the legal term used for this kind of fraud is known as defalcation. It is considered one of the simplest forms of white-collar crime. It is difficult to detect fraud in businesses as there is no direct audit trail that can be followed to the source. Often, this kind of fraud is discovered by accident, or if a company suspects that it is going on.

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How does Skimming Happen?

In simple words, Skimming is a process that thieves use to collect information and data related to any particular card using a magnetic strip at the point of time you have used it. The fraud is done with the help of a device named a skimmer.

A skimmer is a small device or it is like a magnetic strip hidden inside an ATM or POS machine. It is used to steal information about the card as the card is being swiped on the ATM or POS machine. Online attacks can be done with malicious codes to infect e-commerce websites. With the help of these malicious codes, the details of the card entered by the user on the infected website will be sent to the hackers and it will be too late till the time it is detected.

Imagine you’re at the store, swiping your credit card to pay for your groceries. And you are unaware of the tiny device attached to the card reader that steals your card information.

Hidden cameras, illegal components inside a card reader, and devices on top of the actual reader can also skim card information. The fraud can be done with the help of cameras as well. They’re designed to blend in with legitimate card readers, making them difficult to spot and detect.

Types of Skimming

After getting information about what is Skimming, you should also know what are the various types of skimming. Check out the various types below:

  • ATM Skimming: Skimmers like overlay skimmers on the card slot or hidden cameras to capture PINs or fake keypads are placed on ATMs.
  • Fuel Pump Skimming: Skimmers like card readers or hidden cameras are placed on fuel pumps for fraud. 
  • Point-of-Sale (POS) Skimming: Skimmers are used on payment terminals in retail stores shopping points, restaurants, or cafes. 
  • E-commerce Skimming: This is done by injecting malicious codes on the payment pages of the e-commerce websites.
  • Card Reader Overlay Skimming: Realistic-looking skimmers are placed on the top of legitimate card readers at various places.

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Tips and Tricks: How to Prevent Skimming?

Skimming can be prevented by taking some proactive measures. It is required to be vigilant to avoid any kind of fraud. Here are some of the most effective tips and tricks to prevent this fraud:

  • Always inspect the card readers before inserting any card into it.
  • Check out for signs of tampering or suspicious devices on the card reader.
  • Look out, if anything seems suspicious or unusual.
  • Always try to use ATMs in public view with security monitoring.
  • Use ATMs in well-lit and secure areas.
  • Always avoid ATMs in remote locations.
  • Always cover the keypad while entering the PIN.
  • Mobile wallets or contactless cards should always be preferred.
  • Enable the transaction notifications of your cards and accounts.
  • Keep reviewing the statement regularly.
  • EMV chip-enabled cards are anyhow better than magnetic stripe cards.
  • Always prioritize using low-limit cards for online and physical transactions.
  • Use only trusted websites for online transactions.

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What is Skimming?

Skimming is a process of copying the cardholder’s personal payment information. It is an illegal practice to steal credit/debit card information that can either be a misdemeanour or a felony for more serious theft cases.

What are the types of Skimming?

Skimming can be of many times, but in regards to cybersecurity, it is mostly of five types:
-ATM Skimming
-Fuel Pump Skimming 
-Point-of-Sale (POS) Skimming 
-E-commerce Skimming
-Card Reader Overlay Skimming

What is skimming credit card fraud?

Skimming is an act of obtaining personal data from ATM, debit, or credit cards while they are swiped at an ATM or a merchant location.

Are Forex card safe to use and avoid skimming?

Forex card these days comes with an EMV chip that helps to protect the card from skimming.

How do you detect skimming?

Always check out the ATM before swiping your card. Don’t miss checking out for the hidden cameras, or overlay keypads or any unusual thing in the ATM.

Remember, knowledge is power! By understanding what is skimming and how it works, you’re already one step ahead in protecting yourself from fraud. Stay vigilant and keep an eye out for any signs of fraud.

To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.

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About Farina Khan

Farina Khan is a journalist by profession and a writer by passion. She carries over a decade of experience in Journalism and Mass Communication and worked with some renowned media organisations like Doordarshan and Zee Media. She performed numerous roles during her work tenure including reporting, anchoring, and heading output as well. Her passion for writing, combined with dedication in delivering high-quality content, drives her to excel in the dynamic field of content writing. From thought-provoking articles to SEO-friendly blog posts, or engaging website content, She is here to bring the ideas to life through words.

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