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    Wall Street Journal: Thieves Swipe Debit Card Data

    The Wall Street Journal reports on the latest case of people victimized by criminals using “skimmer” devices. “Skimmers” are devices that read and capture data off magnetic strips on credit cards, driver’s licenses, ATM cards. It isn’t hard to find the technology for credit- or debit-card skimming. Card readers are readily available from stores for a few hundred dollars. Last year, the Washington Post reported that police suspect a Wachovia ATM was hacked and a skimmer added to steal bank card data.

    The Journal reports:

    Ms. Ramundo is one of an unknown number of shoppers at Michaels stores in 20 states whose bank accounts were looted after they had used their bank debit cards at the retailer.

    Thieves tampered with the retailer’s debit-card processing equipment at about 80 stores from Massachusetts to Washington, according to the chain’s corporate parent, Michaels Stores Inc. The thefts apparently involved the use of electronic devices called skimmers that allowed crooks to record information from shoppers’ debit cards and steal their personal identification numbers, or PINs. […]

    Thieves were able to use the stolen data to create duplicate debit cards and use them at automated teller machines to steal money directly from victims’ bank accounts, primarily in denominations of $500.

    Michaels Stores said it first became aware of the fraud scheme in early May after police departments around Chicago began receiving reports from consumers alleging their bank accounts had been looted, primarily from thieves using ATMs in California. […]

    Fraud involving debit cards, PIN numbers and card processing equipment has increased fivefold over the past five years, said Avivah Litan, a payment-fraud analyst at Gartner Research. While gangs initially targeted bank ATMs, such schemes have expanded to include card processors at gasoline pumps and now at retail chains.

    A type of debit card embedded with a microchip instead of a magnetic strip is considered more secure and is standard issue in Europe, said Ms. Litan. But U.S. retailers have resisted the cards because of the cost involved in replacing existing card processors to read the microchip.

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