16 July 2008

An argument for paying cash on vacation

This isn't "news" but it is informative and to the point -

"A few years back local law enforcement brought an interesting question to one of my labs: Why were hookers, tweakers, and thugs carrying around pockets full of hotel room keys? Busts of the local street criminals were producing a virtual cornucopia of hotel room keys of all shapes and sizes. In addition, the cops found gift cards, rewards cards, player's cards, calling cards, membership cards -virtually everything that had a magnetic stripe on it.

It turned out that the magnetic stripes contained credit card information. The source data was either "skimmed" or "duped" from the original card and then recorded on the magnetic stripe of hotel room keys with widely available card reader/writers . There was a burgeoning industry in this form of credit card fraud, with well-organized groups working within a moderately well-defined chain of command. The bottom-feeders were collecting the information and passing it up to the criminal leadership who then either imprinted the account information on the room keys, brokered the account information over the Internet, or traded the information with other criminals

The most prevalent threat was skimming since it doesn't require separating the card from the owner. This produces a much longer useful life for the credit card information - by the time the user or credit card company discovers that the card has been compromised, the thieves have already moved on to the next victim. A common skimming tactic is to "double swipe" - once at the point-of-sale terminal, and once on a hand held device. Current battery powered skimmers about the size of a thumb, cost less than $500, can hold thousands of credit cards, and have USB interfaces for ease of downloading. At the time of this investigation, local law enforcement discovered that most of the skimming was taking place in ethnic restaurants. The wait person could easily conceal the skimmer in their apron or a pocket and complete a shift with dozens to hundreds of credit cards skimmed..."

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