If you're not aware how the crime works, crooks can buy a magnetic stripe reader like this off the Internet for as low as $20.
They can affix the device to a gas pump or ATM and when you insert your card, they read all of the information. In some cases a camera may be installed to watch the pinpad (where you enter your PIN ) or your zip code. Sometimes they will just loiter in the vicinity and watch you punch in the numbers.
Once the data is stored they download it to a computer and will either order product from merchants that don't require extra information like the 3 digit CVV code on the back or they can simply buy blank cards and load your credit card information to it. Once they have a loaded card, they'll use it at gas stations or self check-out at various stores.
Another way the scam works is they will give the skimmer to a waiter / gas station attendant / clerk and pay them to harvest the information. In this scenario the accomplice will write down the CVV after the skim has happened making it even easier for thecrime to happen. So how can you protect yourself?
Here are a few easy steps:
- If using an ATM, gas pump or any other manual device - grab the plastic area where the card inserts, If it feels loose or looks different than other readers - Don't use it and alert the store / bank branch etc.
- Shield the keypad as you enter your PIN #. Simply place your hand over the pad and block it from view
- At bars or restaurants walk with the staff to the credit card terminal when it's time to pay. Seriously. Explain to them "why" and you may be doing them a favor so they don't get ripped off.
- Use cash - although as someone who travels for a living I know this isn't always practical or safe in every instance.
- Have your bank or card provider put you on alert for any suspicious activity. Many do this already but in some smaller banks you'll need to request this service.
In case you haven't I've picked out some of the better ones: