When swiping your card for coffee, or buying a luxury sofa, have you ever thought about how safe your credit card really is? If you have not, think again.
While payments are becoming faster and more cashless, scams are getting trickier and harder to detect. One of the biggest threats today to businesses and individuals in this context is card cloning—where fraudsters duplicate card’s details without you even knowing.
Card cloning can lead to financial losses, compromised data, and severe damage to business reputation, making it essential to understand how it happens and how to prevent it.
Let’s explore what is a clone card is and how it can impact you.
Card cloning, or card skimming, involves the unauthorized replication of credit or debit card information. In simpler terms, think of it as the act of copying the information stored on your card to create a duplicate.
This allows criminals to create fake credit cards and use them for illicit transactions.
Below we discuss three main types of cards that have varying vulnerabilities–
Protect data, prevent fraud.
Stay ahead with HyperVerge’s smart AI-driven fraud detection solutions. Schedule a DemoSkimming, one of the most widespread methods of card cloning involves attaching a tiny, hidden device called a skimmer to ATMs, gas station pumps, or point-of-sale (POS) terminals. If a skimmer is installed on the machine, it captures your card’s magnetic stripe data as you swipe. Additionally, hidden cameras might record your PIN, and CVV (as you enter it), providing the fraudster with all the necessary information to create a fake credit card (or even debit card).
The worst part? You may absolutely have no clue that your card has been cloned unless you check your bank statements, credit scores, or emails,
Data breaches are another significant threat where hackers breach the security of a retailer or financial institution to access vast amounts of card information.
For example, in 2017, the American credit bureau Equifax suffered a major breach, exposing the private data of 147.9 million Americans, 15.2 million Britishers, and about 19,000 Canadians, marking it as one of the largest identity theft cybercrimes! These stolen details are often sold on the dark web or used directly by fraudsters to clone cards.
Once thieves have stolen card information, they may engage in something called ‘carding.’ This involves making small, low-value purchases to test the card’s validity. If successful, they then proceed to make larger transactions, often before the cardholder notices any suspicious activity.
RFID skimming involves using devices that can read the radio frequency signals emitted by contactless payment cards. Fraudsters with an RFID reader can swipe your card information in public or from a few feet away, without even touching your card.
Phishing (or think social engineering) exploits human psychology to trick individuals into revealing their card details. For example, you might receive an email that appears to be from your bank, asking you to update your card information. If you fall for it and provide your details, the scammers can then clone your card.
As explained above, Point of Sale (POS) and ATM skimming are two common methods of card cloning that exploit unsuspecting consumers. In POS skimming, fraudsters attach hidden devices to card readers in retail locations, capturing card information as customers swipe their cards. Similarly, ATM skimming involves placing devices over the card readers of ATMs, allowing criminals to gather data while users withdraw cash.
Both methods are effective due to the high volume of transactions in busy environments, making it easier for perpetrators to remain unnoticed, blend in, and avoid detection.
Gas stations are prime targets for fraudsters. By installing skimmers inside fuel pumps, they capture card data while customers fill up. Many victims remain unaware that their information is being stolen during a routine stop.
With the rise of contactless payments, criminals use concealed scanners to capture card data from individuals nearby. This method allows them to steal multiple card numbers without any physical interaction like explained above in the RFID skimming method.
We have some interesting stats and incidents on the record for you–
Card cloning can be a nightmare for both businesses and consumers, and the effects go way beyond just lost money.
For businesses (where customer data is stolen to clone cards), customers feel betrayed, and many might never shop there again. On top of that, the business might have to deal with legal threats, fines, and compliance issues. Not to mention the cost of upgrading security systems and hiring specialists to fix the breach.
Consumers, on the other hand, experience the fallout in very personal ways. Victims may see their credit scores suffer due to misuse of their data. Moreover, stolen information might be used in dangerous ways—ranging from financing terrorism and sexual exploitation on the dark web to unauthorized crypto transactions.
Lastly, let’s not forget that such incidents can make the individual feel vulnerable and violated and significantly impact their mental health.
Card cloning is a real, constant threat, but there are several steps businesses and individuals can take to protect their financial data.
Wondering how? Let’s find out–
For business, our no.1 advice would be to upgrade payment systems to EMV chip cards or contactless payment methods. These technologies are more secure than traditional magnetic stripe cards, making it harder to clone card information.
Actively discourage staff from accessing financial systems on unsecured public Wi-Fi networks, as this can expose sensitive information easily to fraudsters.
Make it a habit to audit your POS terminals and ATMs to ensure they haven’t been tampered with. You can educate your staff to recognize signs of tampering and the subsequent actions that need to be taken.
Besides these pointers, businesses should encrypt all customer data, regularly update security software, and ensure 100% PCI compliance (compliance with Payment Card Industry Data Security Standard (PCI-DSS)).
Pro-tip: Not investing in advanced fraud prevention solutions can leave your business vulnerable and risk your customers. If you are looking for a solution, look no further than HyperVerge. With its smart AI systems, it can detect unusual patterns in real-time, and stop fraud before it impacts your business, thereby saving you time, money, and most importantly, customer trust.
Pro-tip: Shred/properly dispose of any documents containing sensitive financial information to prevent identity theft.
Businesses of today need to protect customer data, maintain compliance, and invest in advanced technologies to reduce fraud risks. HyperVerge’s AI-powered solutions are a game-changer in this fight.
From biometric face checks during high-risk activities like logins and transactions to deep image analysis, forgery detection, and face deduplication, HyperVerge offers a robust toolkit to prevent fraud. Their advanced face recognition and passive liveness detection make it much harder for fraudsters to clone cards or create fake accounts.
Don’t wait for fraud to hit. Protect your business and your customers with advanced, AI-powered solutions.
Learn more about how HyperVerge can safeguard against card cloning at HyperVerge fraud prevention solutions.
Unexplained charges on your account, random alerts for purchases you didn’t make, or unfamiliar withdrawals from ATMs could all indicate your card has been cloned. You might also notice random OTPs pop into your inbox that fraudsters use to check your card’s validity.
Immediately contact your bank or card provider to freeze the account and report the fraudulent activity. Request a new card, update your account passwords, and review your transaction history for additional unauthorized charges.
To ensure full compliance with PCI, businesses should encrypt transmitted data, update software, use firewalls, implement strong password policies, restrict data access, and regularly monitor security logs and systems.
One emerging trend is RFID skimming, where thieves exploit the radio frequency signals of chip-embedded cards. By simply walking near a victim, they can capture card details without direct contact, making this a sophisticated and covert method of fraud.