Dan recently told me about one of the latest concerns in the law enforcement community. It involves credit or debit cards and the use of a small, handheld device called a "card reader" very similar to the one pictured here.
The card reader plugs into a PDA or cell phone. The thief makes a deal with an employee of a retail or service business such as a waitress, retail clerk, or gas station attendant.
The typical scenario is as follows: The waitress brings the bill to the table, then tells the customer that she will take payment to the front when the customer is ready. The customer takes his credit card out of his wallet, hands it to the waitress, who then walks away. On her way to the cash register, she swipes the card through the card reader, which in turn stores all of the information from the magnetic strip on the credit card. The credit card is then charged and returned to the unsuspecting customer. He puts the card back into his wallet, totally unaware that it has now been compromised. At the end of the shift, the waitress meets the thief who pays her $25 or more for each card swiped. He then makes a duplicate card using hotel key blanks and uses it at gasoline stations or other locations which don't require a PIN number. The spending spree continues until the theft is discovered (usually when the billing statement arrives) and the original account is closed. In the meantime, the thief has had ample time to put significant purchases on the account.
Prevention is the key. No matter how many times you have been to a restaurant, store, service station, etc., NEVER allow your credit card to be taken out of your sight. Personally carry it to the cash register and watch as it is swiped through that business's card reader. Insist on a receipt and write the name of the cashier on that receipt. If unauthorized transactions do occur, those receipts will assist law enforcement in tracing back to the time of the compromise.
The bottom line is we all must be very careful of our personal information in the age of microchips, scanners, bluetooth technology and micro-processors.