The Hidden Risks of Handing Over Your Credit Card : Scambusters #1,193
After enjoying a meal, the server takes your credit card to process the payment. This seems like a normal routine, but during those few moments when your card is out of sight, someone could copy, skim, or steal your card information.
Credit Card Purchases: Out of Sight, Out of Your Control
Is your dinner worth a data breach? It certainly can happen when you hand your credit card to a server at a restaurant. You might not think about the risks. This common practice can lead to credit card scams and fraud. When your card is out of sight, you lose control over how your information is used.
The Risk of Handing Over Your Card
When a merchant takes your physical credit card to process a payment, they can see all the information they need to make unauthorized purchases. This includes your name, credit card number, expiration date, and the CVV code on the back. While most businesses are honest, a dishonest employee could misuse this information.
What Types of Businesses Pose a Risk?
Reports show that credit card misuse can happen anytime a card is taken from the customer for payment. Restaurants and bars are the most common places for this type of fraud, but it can also occur at other businesses, including:
- Drive-thrus
- Valet parking services
- Hotels (during check-in)
- Any retail store where an employee takes your card to a different location to process the transaction.
Who Do Scammers Target?
Scammers often take advantage of situations rather than targeting specific people. They may focus on customers who seem distracted, are in a large, noisy group, or appear to be tourists. Their goal is to act quickly while the cardholder does not notice that their card is being misused.
How Can Your Information Be Compromised?
A dishonest employee can compromise your credit card in several ways after taking it from you:
- Manual Copying – They can quickly write down your credit card details.
- Skimming – They can use a small, concealable device called a skimmer to swipe your card and clone its data.
- "Card-not-present" Fraud – They can use the card details to make online or phone purchases.
How the Scam Unfolds
Here is a typical scenario of how a credit card scam occurs in a restaurant setting:
- The Transaction – You finish your meal and give your credit card to the server.
- The Opportunity – The server takes your card to a point-of-sale (POS) terminal that is out of your sight.
- The Act – Before processing your payment, the server quickly swipes your card through a handheld skimmer hidden in their pocket or apron. This device instantly copies the data from your card's magnetic stripe.
- The Return – The server processes your payment, adds the tip you chose, and gives you back your card and receipt. Everything looks normal.
- The Fraud – The scammer takes the stolen data from the skimmer. They might sell this information on the dark web or use it to make a fake card for buying things fraudulently. You may not realize something is wrong until you see unauthorized charges on your next statement.
To fight this kind of fraud, many restaurants now use portable payment terminals. These terminals let you pay at your table, which is safer because your card stays with you. However, even these portable terminals are not entirely risk-free. Scammers have found ways to compromise them.
Can Skimmers Be Placed on Portable Terminals?
Yes, criminals can put skimmers on portable payment terminals. These skimmers look like real parts of the machine. When you insert or swipe your card, the skimmer captures your information while the terminal processes your payment normally. Sometimes, they also use a fake PIN pad cover to steal your PIN.
Red Flags to Watch For
Be vigilant when using a portable terminal. Look for these warning signs that a device may have been tampered with:
- Loose or Ill-Fitting Parts – Check if any part of the terminal, especially around the card slot, feels loose, bulky, or poorly attached.
- Misaligned Graphics – Look for mismatched colors, logos, or branding on the device.
- Unusual Prompts – Be careful if the terminal asks for your PIN during a transaction that should only need your signature.
- Sticky or Unresponsive Keys – If the keypad feels strange or some keys are hard to press, it could indicate a fake overlay.
- Difficulty Inserting Your Card – If you struggle to get your card into the slot, a skimmer might be obstructing it.
If you notice any of these red flags, do not use the terminal. Ask to pay with an alternative method and alert the manager immediately.
Protecting Your Financial Information
The Consumer Financial Protection Bureau (CFPB) has regulations in place, such as the Electronic Fund Transfer Act (EFTA), which limits consumer liability for unauthorized transactions. Under federal law, your liability for fraudulent credit card charges is capped at $50. However, preventing fraud is always better than dealing with its aftermath.
What to Do If You Become a Victim
If you have become a victim of credit card scams and/or fraud, below are some resources that can help you:
- Contact Your Bank or Credit Card Issuer – Immediately report the fraudulent charges and request that your card be canceled. They will issue a new card and guide you through the dispute process.
- File a Police Report – Contact your local law enforcement to file a report. This creates an official record of the crime.
- Report to the Federal Trade Commission (FTC) – File a report with the FTC. This helps federal authorities track and combat fraud.
- Identity Theft Resource Center (ITRC) – ITRC is a non-profit organization that provides free assistance to victims of identity theft.
- Example of A Server Stealing Your Information – Check out the video showing how a server steals credit card information.
Conclusion
Using a credit card is convenient, but it’s important to be careful. Whenever you can, use pay-at-the-table devices and check them for any signs of tampering. If you need to hand over your card, think about using a low-limit or virtual card for extra security. By staying cautious and informed, you can protect yourself and enjoy your dining experiences.
Remember, Stay Alert and Stay Informed!