Hopefully you’re aware that it’s possible to compromise your credit or debit card without your card having been lost or stolen. What may be puzzling to you is the extent to which thieves go to get this information – and how they use it.

I had a client come in today that was completely stumped as to how his card had been compromised when it had not left his sight in the last several weeks, and he had not used in over a month. Naturally, he was concerned. I went through the normal routine questions, asking if anyone else had access to the card or would have taken the card without asking his permission. I also asked if he had scheduled any preauthorized payments using his card. When none of these questions proved to be any good, I looked more closely at the transaction.

The purchase was done at ‘point of sale’ with an in-person indicator. I explained that to the member, thinking perhaps he had forgotten. However, he produced movie tickets showing he was in the theater at the time the purchase was made. I don’t think someone would buy movie tickets and not go, just to say they didn’t use their debit card for a $60 gas purchase. So, this got me to thinking. Whenever crooks get a hold of your credit or debit card, the first thing they usually do is fill up on gas – they’re nothing if not predictable in that way.

Unfortunately, I can’t say with 100% certainty what happened, but I have a theory. There has been a recent rise in scams where criminals have purchased credit cards from “black market” websites selling the information. What’s odd about this is that the thieves are using X-Acto knives and super glue to fashion themselves a new card. When they get a card number, they scrape the numbers off of old gift cards, expired credit or debit cards, or any other type of cards with digits on them. Then, they super glue the numbers to a stolen or expired card (having removed the other digits first). Once the numbers are added to the card, they will likely scrape the magnetic strip in the back, making it “unreadable.” With the card unreadable, the cashier will have to manually enter the numbers. You can read more about this over at creditcards.com.

So, I explain my theory to my member and he gets upset. He wants to know how that’s possible, how cashier’s don’t catch such things. I explain to him that these criminals are very often good at their craft and they’re good conversationalists as well. They usually find some way to distract the clerk so he or she doesn’t look too closely at the card or ask for ID, and they’re very careful (for the most part) about where they use the card.

The member said he thought all criminals were high-tech now, using the internet and the like to scam people. For all intents and purposes, the criminals that took his card number did use the internet to scam him, though it wasn’t direct. But, by choosing to create a fake card with real numbers, they draw less suspicion to themselves, and ultimately, this is much harder to track.

There are other scenarios that fit this particular situation, but I feel like my theory is the most prominent just given the increase in this type of ID theft. At any rate, I froze the old card, issued him a new one, and submitted a dispute for the charge so that we could get his money back to him. He was still concerned about the idea that someone would get his new card number if he tried to use it online again. I recommended that he use Visa gift cards when shopping online because they are disposable and not linked directly to any of his accounts. It’s a pain to have to buy them, and it may end up costing more than it’s worth in the long run, but if security is a concern, that’s one way to keep criminals out of your bank accounts.

What do you think? Have you heard of this type of ID theft? Do you use your credit and debit cards online? Have you run across any mysterious charges that you know you didn’t make, but don’t know how they happened with your card safely tucked into your wallet?

Related posts:

1. Who’s Stealing Your Credit Card? Five Quick Portraits of Identity Thieves
2. Debit Cards Vs. Credit Cards: Plastic Showdown
3. Travel and Credit Cards: 7 Tips Before Hitting the Road
4. Credit Cards Through Financial Institutions
5. An Overview: Prepaid Debit and Gift Cards