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As some of you may or may not know, I am an economic crimes detective at a suburban police department in Florida. Having witnessed these crimes in a very close and personal way, I have developed somewhat of a passion to educate the public on these types of crimes so that they can better avoid becoming victims themselves or, having already been targeted, keep their monetary losses to a minimum. What I would like to discuss today is something we have been seeing a lot more of lately: credit card skimmers placed inside gas pumps.

What sparked this post was a recent syndicated piece appearing on fool.com from GOBankingRates: http://www.fool.com/investing/general/2016/05/12/7-ways-to-p...

Having read the article over the weekend, its been gnawing at me to speak up because, unfortunately, the article contains some out-dated and incorrect information. Please note, I'm not trying to pick on fool.com or GOBankingrates.com (where the article first appeared in April). This kind of misrepresentation of information is found all over the internet because many personal finance writers just don't have first hand information on this type of thing.

On the other hand, my department routinely goes through and performs inspections on the gas pumps in our city. We almost always discover some. Last month, we found four when we went through the city. The problem is so prevalent that bank and credit card fraud investigators will come out and assist us with the citywide sweeps.

Before we get to the errors in the article, let's address we are seeing a rise in credit card skimmers:

As many of you know, last October a huge liability shift for fraudulent credit card transactions occurred. Retailers either had to shift to taking EMV chip-embedded credit cards or be accountable for all of the fraudulent credit card activity at their place of business. What you might not know, though, is that self-serving gas station pumps do not need to be equipped with card readers that accept EMV payments until 2017.

There are a variety of reasons gas stations were given an extension on this deadline. Namely, changing out gas pumps is an extremely costly and time-consuming event. Besides paying for new readers, gas station owners must also have each pump inspected for accuracy by state authorities before it is authorized to serve motorists.

Unfortunately, this means two more years of thieves stealing credit card info from unsuspecting consumers. And because many retailers have made the transition to EMV-compliant terminals already, we are seeing a concentration of fraud at the weakest links in the payments chain. Right now gas stations are that weakest link.

Back to the article. The first claim the article makes is that "Gas station credit card skimmers are external devices that thieves attach over a real credit card slot at a gas station pump." Just a little later we read, "If a credit card slot looks different from the other card readers at the station, it might be a setup for a credit card skimming fraud...they are attached using only double-sided tape, so thieves can easily remove them. Before sliding a credit card through the machine, tug on the reader to ensure it is securely attached; skimmers will easily pop off with little effort."

Wrong, wrong, wrong. I am sure somewhere, someone might still use this method but I haven't personally seen it in years. These days fraudsters are much more sophisticated and, with just a little more effort, can place the skimmer inside the pump itself.

Do not be fooled into thinking you could spot them from the outside. There are two basic types of pumps, one of which can be opened with a universal key that can be bought online and one where the siding can simply be unscrewed using a cordless screw gun in a matter of seconds. Hence they are easy to open, place the device inside, and close back up. If the fraudsters are pros, they can do this in under a minute; two minutes top. Many times, the fraudsters will send someone inside to the clerk to buy a product or distract them in some other sort of way. When the skimming devices are placed inside this way, they are impossible to spot without opening up the pump.

Rarely do you find a gas station owner who spends extra on added security features for his pumps. In fact, in our city, there is exactly one gas station out of about twenty that placed special locks on its pumps.

Later, when the article does acknowledge that skimmers can also be placed internally, it tells the reader to look for the tamper-evident stickers:

Survey the gas pump's edges -- especially the hatch surrounding the credit card unit. If it looks battered, as if someone tried to pry it open, or if the lock itself is broken, it might be compromised. Some gas stations, like Shell stations, apply a tamper-proof seal across the opening of the credit card door. When a door is broken into, the sticker is lifted revealing the words "VOID" on the sticker.

What to do: Before using a gas pump, find out whether the pump has a tamper-evident sticker. If it has one that is placed on the unit correctly -- across the opening of the door -- and it reads "VOID," move on to the next pump or station.


Unfortunately these stickers are worthless. They are often placed wrongly on the pump. They are rarely replaced in a timely manner by employees after an inspection or even when paper is replaced for receipts. There have been times when I've opened a pump and the sticker just came off the pump as I opened it. I could have easily picked it up and placed it back on the pump. They are also easily faked by fraudsters. These stickers will only give you a false sense of confidence when using a pump.

I don't want to bash the article too much. Point #s 5-7 are solid advice. As the article suggests, the only way to completely ensure you will not be a victim of such a device is to go inside and pay for your gas there (assuming the clerk isn't using a device!). In our world, I know going inside to pay actually seems like a Herculean task. I get it. I rarely go inside myself, and I am completely aware of the risk.

So, when paying outside, use the pump or row of pumps closest to the clerk. The vast majority of such devices will be found on the far row of pumps and on the opposite side of the pump from the clerk. This doesn't mean they are never found on pumps closer to the clerk but, in my experience, it is definitely rarer to find them in pumps that are in an attendant’s clear line of sight.

Finally, the most important thing you can do is to keep vigilantly monitoring your money in all of your various accounts. In this day and age, it is extremely rare when an individual consumer is not immediately reimbursed when they report credit/debit card fraud in a timely manner. There are other types of fraud, most involving wire transfers and money services, where this is not the case. But with credit and debit cards, fraud rarely costs the individual consumer real money...if and when it is reported in a timely manner. But also understand that using your credit card affords you more protection than your debit card.

All too often I have seen people, maybe an elderly widow or a carefree single millennial, come in and want to report some manner of fraud involving their bank account that occurred six months ago but which they just discovered. Proving fraud at this point is nearly impossible. Surveillance video is erased. Bank tellers and clerks cannot remember. Any and all evidence is gone. At this point banks will rarely reimburse all - or any - of the questionable charges!

Keep monitoring your accounts religiously and immediately report suspicious activity. That is the single most important thing a person can do to protect themselves from permanent monetary loss after an account of theirs has been compromised.

Matt
Short on fraud, long on stopping it
MasterCard (MA) and PayPal (PYPL) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx
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CMFCochrane,

You wrote, Keep monitoring your accounts religiously and immediately report suspicious activity. That is the single most important thing a person can do to protect themselves from permanent monetary loss after an account of theirs has been compromised.

That.

For credit cards, fraud is largely just an inconvenience. Especially these days. I see all of the transaction activity on my accounts shortly after the authorizations go through. Worse case, it's a day or two later - well within the Fair Credit Billing Act requirement to avoid liability.

I have had my cards compromised on several occasions over the decades. I've never had any real difficulty getting the charges removed and the card replaced. It seems to me that for credit cards, fraud is primarily a concern for the issuer and the merchant. That's the reason laws like the FCBA were enacted in the '70s - to encourage credit card use and to standardize consumer protections.

Debit cards and business charge accounts are a different matter. They can be much more inconvenient and you even risk loosing assets when fraud strikes. But that's why I don't use them.

So credit card fraud is primarily an issue for merchants and issuers. If they don't work together to solve this problem, should I care?

Now if you were talking about identity theft ... that's a serious problem that impacts consumers and still needs a better solution.

As for gas stations, I'll still just swipe my card, pump my gas and move on. If my card was skimmed, I'll likely never know it. But I'm not going to worry about it either...

- Joel
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Keep monitoring your accounts religiously and immediately report suspicious activity. That is the single most important thing a person can do to protect themselves from permanent monetary loss after an account of theirs has been compromised.

Our Discover card, which is the card we most use, lets us set alerts for all sorts of things. So, I've set a low transaction limit and also an alert if it is used for an internet purchase. A few more emails to disregard, but I check my email multiple times a day, so I'll find out about any significant fraud within a few hours. Beyond that, I'll go online and check all of my recent credit card transactions at least weekly. This does involve sometimes checking with my wife about a transaction or two.
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I am going to continue to use cash at gas stations, and I don't trust using debit cards anywhere.

The cheaper gas station near us doesn't take credit cards.
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I am going to continue to use cash at gas stations,

Thank you for subsidizing my "cash back" credit card. We get around $2,000 a year in "cash back", and I always say a special thanks to those who still use cash - or write checks - and pay the same price that I do at the registers and pumps.

Each little transaction doesn't seem like much: a few cents here, a dollar or two there, but at the end of the year I'd rather have the two grand than not.
 
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Thank you for subsidizing my "cash back" credit card. We get around $2,000 a year in "cash back", and I always say a special thanks to those who still use cash - or write checks - and pay the same price that I do at the registers and pumps.

You didn't read my entire post. The cheaper gas station near me doesn't take credit cards. The price is lower than the "cash back" rebate I would receive from buying gas with a credit card at a higher priced gas station.
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We get around $2,000 a year in "cash back"

What's your reward percentage? That's somewhere between 40k and 200k in spending.

PSU
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Use cash.
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Use cash.

I like the rewards.

PSU
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Use cash.

============================

That's ok if you can get to the station when there is someone to take the money. With the hours I work the stations around here are closed when I can get fuel.

Jean
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Costco doesn't accept cash.

PSU
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Hey- Balloons!

peace & carry on
t
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We get around $2,000 a year in "cash back"
-------------------------------------------------
What's your reward percentage? That's somewhere between 40k and 200k in spending.


While I don't have my *cash back*/miles earned number at hand, I know that I spend at least $50k/year on airfare, other transportation & hotels.

peace & it could happen
t
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I know that I spend at least $50k/year on airfare, other transportation & hotels.

peace & it could happen
t


Credit cards make traveling easy and rewards can quickly add up because travel is rarely cheap. We applied for a new travel credit card because it doesn't have a foreign transaction fee and had a $400 cash back reward for new customers.
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Costco doesn't accept cash.

PSU


Unless membership has already be purchased, it would take buying a large amount of gas to recover the membership fee.

There are a limited number of Costco gas stations. When our driving patterns were different and we were spending a lot more on gas, Costco was an option.
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That's ok if you can get to the station when there is someone to take the money. With the hours I work the stations around here are closed when I can get fuel.

Jean


They are completely unattended?
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and had a $400 cash back reward for new customers.

Correction: $200 cash back reward for new customers.
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They are completely unattended?

============================

Yep, After hours you just put in the card and pump the gas. The station in the next town over is that way 24/7.

You don't have stations like that?

Now that I think about it...Oregon and New Jersey probably don't since I think you still need an attendant to pump the fuel in those states.
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Now that I think about it...Oregon and New Jersey probably don't since I think you still need an attendant to pump the fuel in those states.

==============================

Oregon just changed the law a little.

http://www.dailyastorian.com/Local_News/20150821/a-change-at...

The law simply gives gas stations the option to permit non-commercial motorists to fill their own tanks when an attendant isn’t present between 6 p.m. and 6 a.m., and only in counties with populations of 40,000 or less.

I live right inside the border of WA and drive in eastern Oregon a lot. This is good news.

Jean...has been know to look for gas stations in the wee hours of the morn.
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Unless membership has already be purchased, it would take buying a large amount of gas to recover the membership fee.

There are a limited number of Costco gas stations. When our driving patterns were different and we were spending a lot more on gas, Costco was an option.


This thread isn't about the costs of Costco membership but since you feel the need to open that can of worms, Costco is $0.10-$0.15 cheaper than nearby stations here.

Of course, I expect a response from you since you always feel the need to have the last word.

PSU
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The station in the next town over is that way 24/7.

We used to have a station like that. There wasn't even a building on location for an attendant to sit in.

PSU
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Just a quick follow-up to this post. As coincidence would have it, I attended a training conference today at the closest Secret Service Field Office to my department. The first topic they covered? Credit card skimmers in gas pumps. I'm telling you, this is quickly becoming a big problem. So a few more points:

The average time it takes for a fraudster to open a pump, attach the device, and close the pump back up is around one minute. In a video they showed us, we saw a criminal do it in 32 seconds.

The average skimmer is left on the pump for about 2-4 weeks and can hold about two thousand credit card numbers.

Most of the rest of that session is covered in my original post, though they also talked about waiters/waitresses skimming cards too.

One case, in Miami, had one person recruit four different waiters/waitresses at four different restaurants. He paid the servers $20 for each credit card # they skimmed. He would then use the credit card info to purchase between $300-$1000 in gift cards. The ring lasted for over a year and involved over 3000 victims by the end of the case (I can't even imagine the man-power that went into documenting this case!). The ring was finally busted when one of the waiters skimmed all four credit cards from the same table of a party of four. That made tracking down the origin of the fraud much easier.

Not much you can do about this one. Just be aware and check your accounts diligently.

Matt
MasterCard (MA) and PayPal (PYPL) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx
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Given your comment about people not noticing and reporting fraud till 6 months later, I am always amazed to see how many people, either leave their receipts on top of the pump or crumple and throw away. We check every receipt against the monthly statement. It doesn't happen often, but once in a while I find an error (always to the merchants advantage) when doing the monthly comparison.

On a related note, I help my Mom check her Medicare transactions on line as a fraud prevention. Once during the past year we found charges from a provider far in excess of our understanding of the total cost. I challenged the provider and who gave us some hokey excuse, and as a result we stopped using that doctor. Not exactly fraud but still a bit questionable.
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We still write checks for all of our utility bills except one, and to pay various other bills (property taxes, etc.)
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"Now that I think about it...Oregon and New Jersey probably don't since I think you still need an attendant to pump the fuel in those states."


My favorite Jersey bumper sticker states:

"Jersey girls don't pump their own gas."

Still no self service gasoline in NJ, and they should keep it that way forever as far as I'm concerned.
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On a related note, I help my Mom check her Medicare transactions on line as a fraud prevention. Once during the past year we found charges from a provider far in excess of our understanding of the total cost. I challenged the provider and who gave us some hokey excuse, and as a result we stopped using that doctor. Not exactly fraud but still a bit questionable.

============================

I think this is a big one. We had the hospital here billing for home nurse care that didn't happen. It was caught because someone looked at the bill and hadn't had anyone come to his home.

I wonder how many folks look at the bill, since it's paid by Medicare.
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I check the on-line Medicare bill for Mom at least monthly. The situation I described was not blatant fraud, because the provider did provide a service. But he charges were WAY more expensive than we were led to believe. Their attitude was also poor; they were kind of like, "its Medicare, what do you care?" I care a lot.
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...Having read the article over the weekend, its been gnawing at me to speak up because, unfortunately, the article contains some out-dated and incorrect information. Please note, I'm not trying to pick on fool.com or GOBankingrates.com (where the article first appeared in April). This kind of misrepresentation of information is found all over the internet because many personal finance writers just don't have first hand information on this type of thing. ... - CMFCochrane | Date: 5/16/2016 3:58:33 PM | Number: 310525

Unfortunately, TMF quite often has inaccurate information even though TMF often holds themselves to be authoritative!!!

David
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