Is Your Credit Card Being Cloned?

ByABC News
May 18, 2001, 2:21 PM

L O N D O N, May 21, 2001 -- If you think cloning is just about creating identical sheep, you better grab hold of your wallet. Cloning, also known as skimming, is a burgeoning and highly effective form of credit card fraud.

Skimming is costing credit card users stateside and worldwide millions in phony charges, as stolen clones are sold and used in the United States and elsewhere around the globe.

The practice took off in the United States several years ago and is beginning to approach the scale of fraud that plagued credit cards in the early 1990s before new precautions were taken, according to Gregg James, a special agent with the Secret Service's Financial Crimes Division in Washington.

As many as 10 to 15 restaurants a week around the United States are cited by industry sources as harboring skimmers, James says. And while the agency and credit card companies are tight-lipped about the actual dollar losses because of competitive concerns, he called New York a "hotbed" of skimming among U.S. cities. Skimming is also keeping Canadian authorities busy and is growing in Mexico.

"Any place you use your card, you could be a victim," adds James.

An Unknowing Victim

Kathryn Mangold learned that the hard way.

A manager at a leading hospital in London where the scam so far is centered she unknowingly became a victim in April, when a week after shopping in central London she received a letter from Barclaycard, Britains biggest credit card company, which had issued her Visa card.

Normally very vigilant and careful with her cards, she was shocked to read that there had been abnormal activity on her account. After speaking directly to the bank she found out that someone had gone on a shopping spree the weekend after her shopping trip and, using her card details, they had spent the equivalent of more than $800 in a computer superstore and a toy store chain.

Lucky for her, the bank acted quickly and canceled her account number.

Says Mangold, Although my faith in credit cards has been shaken there is no viable alternative at the moment.