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Understanding “White Card” Fraud
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MSNBC did a piece about how “white card” fraud, where counterfeiter’s create their own credit cards based on stolen magnetic strip data, works including how the cards are made and the technology behind it.
Criminals somehow get their hands on the electronic information stored on a legitimate card’s magnetic stripe. Generally, it’s stolen from a retailer or payment processor’s database, as happened when thieves last year broke into computers at CardSystems Solutions Inc. Luckily for the criminals, CardSystems didn’t store just account numbers — it even stored customer’s secret codes that were never meant to be copied on magnetic stripes. Stolen “mag stripe” data is the holy grail for card thieves.
Then they take the stolen data and write it onto a new, blank card — a card that’s often plain white — and they’re off to the bank.
via MBNBC and well worth the read.
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I once remember watching a report on this a while ago. In one instance, a thief had installed a pinhole camera directly above a pin processing pad. The pin pad was rigged so that the buyer swiped their card two times.
The first time the card was swiped, the magnetic data was recorded into the machine. The second time that the card was swiped, the transaction went through. While the customer entered their pin number, the overhead camera captured the secret code.
The thieves would then unload the magnetic information that was stolen and reprogram it on to blank magnetic cards, sometimes they used the same cards that the hotels use.
With a complete identical card and a valid pin, they were able to get cash directly from ATM’s from hundreds of people.
That is why I always look above me when i’m entering my pin when purchasing with a debit card.