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Thursday, 4 January, 2001, 09:51 GMT
How credit cards get cloned
Replicating credit cards is one of the country's fastest-growing frauds. But, Megan Lane asks, how does it happen?

Ever stared at your credit card statement in disbelief, trying to remember how on earth you ran up such a bill?

Conned cardholders
Ann Widdecombe
Restaurateur Sir Terence Conran
Tribune editor Mark Seddon
It could just be that you didn't run up the bill at all.

It may be that someone got hold of your card details, copied them onto a bogus card, and started spending your money. Card cloning, or "skimming", doubled in the UK in the past year with resulting thefts of up to 300m - that's an astonishing 820,000 each day.

But how do the fraudsters do it?

STEP ONE:

Recruiting
First, recruit an info thief
Their first step is to recruit an unscrupulous bartender, waiter or shop assistant to steal information from customers' credit or debit cards.

They will then give their new recruit a pocketsize device with a scanning slot, which looks like a pager and can even be worn on a belt.

STEP TWO:

They will then instruct them surreptitiously to swipe customers' cards through this device on the way to the till.

Swiping card
Easy as one-two-three
This copies the information held on the magnetic strip - a process which takes just seconds to carry out.

They will probably pay about 100 for the supply of several numbers. The details from gold and platinum credit cards are particularly sought-after.

STEP THREE:

Those details will be downloaded to a read-write machine, available for about 500.

counterfeitng cards
Producing counterfeit cards
Then they will be copied on to a counterfeit card, complete with security hologram markings, probably shipped in from the Far East.

Alternatively, they may overwrite the information on to a stolen card which has got too hot to handle.

STEP FOUR:

Then they spend, spend, spend, like the thieves who stole the card details from shadow home secretary Ann Widdecombe.

Spending spree
Max out that plastic
Police were tipped off by her credit card company, who were curious as to why the famously straitlaced Miss Widdecombe had apparently used the card nine times in one day at a west London pub.

The cardholder remains completely unaware that their card has been cloned until they notice strange things on their statement, or until their credit card company queries any unusual spending patterns.

How to fight back

Home Secretary Jack Straw and the banking industry are considering plans to introduce four-digit pin numbers to foil the cloners.

Careful now
Don't let your card out of your sight
Pick up all receipts
Report stolen cards immediately
And the easily-copied magnetic strips are being superceded by microchips, which use encryption to scramble the cardholder's information.

The Association for Payment Clearing Services (Apacs) - which includes all major banks and credit companies - introduced this technology in April 1999.

Although about 10m smart cards have been issued so far, few retailers are kitted out to use the technology and so have to continue swiping the magnetic strip. By 2003, however, most transactions will be "smart".

Richard Dyson-Davies, of Apacs, says the microchips can't be changed or deleted.

And if someone steals your card and disables the chip, the new terminals will alert staff to ask for ID or decline the transaction - at which point the fraudster typically takes off.

"Within a few years' time in the UK, this type of 'skimming' crime will be dead."

See also:

17 Dec 00 | UK Politics
Widdecombe hit by credit card fraud
15 Mar 99 | Business
Chips down for credit card fraud
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