As you read this article, I hope that you will take time in your busy schedule to carefully scrutinize your credit card monthly statements. Some of you may get the surprise of your life to discover that there are bills in your statements that you did not incur. Then you ask yourself: How did this happen? This was exactly what happened to me at one time. I have been busy doing other things and had barely time to scrutinize my monthly credit card billing statement. Until I got shocked that the monthly billing statement of my credit card purchases included bills that I did not incur. The only reason I was alerted is because the padded unauthorized bill was ten times more than my actual monthly billing statement then. The discrepancy was too glaring. I immediately reported the incident to the bank that issued me my monthly credit card billing statement. The bank in turn debited those unauthorized bills from my statement of account. Many of us may not know it but the bad news is that credit card fraud is now on a globalization blitz. Two weeks ago, two of my friends residing in California, USA told me that their credit cards were hacked too.

How is this credit card fraud committed – one may ask. Simply by copying the information contained on the credit cards magnetic strip and using the same information to reproduce counterfeit credit cards. Thanks to the sophisticated counterfeiting technologies world-wide. It is no wonder then that a credit card – “skimmed” – in the Philippines in the morning can be downloaded on to a cloned–card in Hong Kong by noontime and used for spending sprees (or sell the counterfeit credit cards for hundreds of dollars) by nighttime. “Credit card skimming (or credit card cloning) as defined in About.com is a type of credit card theft that allows thieves to steal your credit card information without stealing your credit card.”

This awesome hi-tech credit card fraud is a big problem to the credit card industry. Why? Because the credit card skimmers are just as smart as the good guys. This is the reason why exporters who travel a lot as well as other travelers and businessmen have to take some preventive measures to discourage the tech-savvy criminals from playing their card skimming game.

When this credit card cloning/skimming happens, the card holder starts to wonder where his credit card was skimmed or to use the layman’s terms where the information from his credit cards magnetic strip was stolen. Was it in the restaurant where he ate? Or in the hotel where he stayed overnight? Or in a department store or boutique where he bought some gifts? Or in the gas station?

Understandably, the credit card industry continues to come up with higher-security credit cards. The big barrier is the cost. Chip-embedded cards which is an alternative to the magnetic strip cards cost ten times more than the magnetic strip cards.

Credit card cloning is not just happening in the Philippines, Taiwan, Malaysia and other Asian countries but also in developed countries as well like Canada and the United States. The modus operandi is the same. The credit card fraudsters are provided with small, electronic devices known as skimmers that capture the details of the credit card in the few seconds that it takes to swipe the card through the machine. The unsuspecting cardholder does not know that after his credit card purchase, the card is swiped and the information is collected from the magnetic strip and is then telephoned in for approval. During this time, the electronic skimmer which is about the size of an electronic pager gets and stores the information.

This captured information can then be downloaded for whatever purpose. A favorite target of the card skimmers are the gold and platinum cards because of their higher credit limit. With higher credit limit, the banks naturally take longer time to find out that there have been illegal and unauthorized big transactions.

In other countries, the banking industry is spending millions of dollars in having credit cards implanted with smart chips to secure the information that the magnetic strip is keeping. Some countries like France use secret PIN numbers and discard the signature at the back of the card. France has been using the PIN system ten years ago and its usage has reportedly reduced French credit card fraud by eighty percent.

Cardholders should therefore be extra careful these days. Not just by regularly checking the bank statements – but also keeping an orderly record of sales slips, receipts and carbon copies of all invoices and receipts of credit card purchases. Credit card holders should not be very lax in giving out credit card numbers to anybody especially those working in hotels, restaurants, gas stations, shops and stores. Likewise, lost credit cards should be reported immediately.

Credit card cloning/skimming as well as other forms of credit card fraud is a crime that affects all of us. This also discourages consumers to make credit card purchases. In short, trade is adversely affected.

This article is written as a public service to create greater awareness about credit card cloning or skimming.

Have a joyful day!