In today’s increasingly technologically advanced world, cybercriminals are more effective than ever. One of the many techniques they use to steal money from others is known as credit card cloning. As the name might suggest, this practice is when criminals make an identical copy of an existing card for their own use.
This article will explore the topic of cloned credit cards in greater detail. More specifically, it will consider what they are, how cards get cloned, and what can be done to protect your personal data. If you would like to find out more about this topic, read on!
What Are Cloned Credit Cards?
Simply put, the crime of credit card cloning involves criminals creating identical copies of authentic credit cards. This can be achieved through a variety of methods. With this data, the ill-intentioned will go on to purchase goods and services fraudulently under a legitimate cardholder’s name or sell the card information on the Dark Web. There are numerous ways in which people can fall victim to cloned credit cards, as we will explore in the next section of this article
How Do Cards Get Cloned?
Here are two main ways for your card to get cloned:
1. Lost or Stolen Cards
Some card cloning methods are harder to detect than others. For example, one of the ways victims can detect when something is amiss is when a card is lost or stolen. When checking bank activity, the original cardholder will be able to see unrecognized transactions that they did not authorize.
Most credit cards have sensitive details on them, including the holder’s name, card number, expiry date, and a three-digit CVV2 security code. If this information falls into the wrong hands, a stolen or lost card provides criminals free reign to do as much harm as they want until the card is frozen by the bank. This is why it is so important that the rightful owner reports any suspicious activity on their card the moment they notice it.
Until it is frozen, fraudsters have technological means by which they can acquire the card’s data via a process called “Credit Dumping.” We will explore this in the following section.
2. Credit Card Dumps
Credit Dumping, also known more casually as “skimming,” is an illegal method used to produce cloned credit cards. This method allows fraudsters to attain a victim’s data when they use their card at physical locations, such as ATMs and fuel pumps. Skimmers are essentially discreet devices planted by fraudsters at these payment locations. Unaware of the danger they are in, victims will insert or swipe their cards into the machine, allowing the skimming device to read and collect the card’s data from the magnetic strip or microchip. Occasionally, fraudsters may even implement fake keypads to record victims’ PIN numbers.
Skimming devices have always been somewhat easier to install in outdoor payment locations, such as fuel kiosks, than in indoor locations. This is because such places are outside of easy detection. This is why fuel stations and ATMs are the most frequent targets of fraudsters.
Skimming technology is becoming more advanced with each passing year. An example of this is the less-noticeable skimming devices that are as slim as the cards they wish to forge. These gadgets can be inserted into ATMs and other payment locations, making it impossible for a victim to know that their data is being breached.
Something that makes credit card dumping trickier—but not impossible—is the ever-growing popularity of numberless cards amongst banks and their customers. Some banks continue to place all of the details on the rear of their cards alongside the security code, but others include no details at all. A strong example of this is JPMorgan Chase Bank, where all the customer’s card details are stored digitally within the banking app.
Contactless payments are highly convenient for cardholders, but it is equally convenient for scammers to snatch card details by concealing a cloning device in a populated area. Fraudsters will then take this information back to their location of operation and place the illegally obtained card information onto cloned credit cards.
Banks like Chase believe that unassuming-looking cards are less likely to be targeted by fraudsters. If numberless cards are lost or stolen, it is significantly more difficult to acquire the details needed for cloning since they are not on the card itself. As the information is stored within the app, the owner will be able to see the latest unauthorized transactions, enabling them to immediately take the required action. At the touch of a button, customers can freeze their cards and switch their details, thus rendering the original card useless.
For all the security benefits of numberless cards, it’s still worth keeping in mind that they are not immune to the likes of hackers and cybercriminals. Therefore, it would be a mistake for an owner of a numberless card to let their guard down when it comes to cloning.
Hackers and the Dark Net
Here are some popular tricks hackers use to clone your credit card:
“Fullz” is a term used by thieves and hackers to describe the collective credentials required to create a stolen identity in credit card fraud. It is similar to credit dumping in that the same methods are used to obtain it, but further personal information is also stolen, including a home address, date of birth, social security number, contact details, card details, and even answers to security questions.
Criminals obtain the above information in a variety of ways. One of the most common methods is spear phishing, whereby fraud rings pose as legitimate companies. These criminals will send emails to vulnerable people asking for information such as card numbers and passwords.
Once this information has been obtained, it can be sold on the Dark Web. A Fullz can be compiled from other external breaches and sold to other criminals within the fraud rings. Once a Fullz has been assembled, it can be temporarily rented out to identity thieves for them to perform their fraudulent activity, including loan fraud, payment schemes, and bank drops.
There are several kinds of loan fraud, but, generally, this is when the fraudster applies to borrow money they have no intention of repaying under the guise of a stolen identity. Using a Fullz profile obtained through skimming and phishing, the hacker can make it appear as if the loan application is authentic. Once they have cleared identity checks with the Fullz, their request will be granted, and they will disappear with the loan.
Some more cunning hackers will develop trust with a lender by repaying what is due on time, which also allows them to achieve a good credit score. Once this trust has been established, they will apply for a much larger loan with a higher chance of being accepted, disappearing with the granted payment.
Buy Now Pay Later (BNPL) Schemes
BNPL schemes are appealing to criminals for many reasons. Opportunistic fraudsters take advantage of them by signing up to create an account with a BNPL provider using Fullz and/or skimmed data. Once this has been completed, they can proceed to order goods without the intention of paying any of the installments currently covered by the provider.
BNPL schemes are a double-edged sword in that they are extremely quick in terms of credit decisions, providing an efficient shopping experience, but this makes them easy targets for fraudsters. Credit checks are carried out by informal internal algorithms belonging to the merchant rather than by official banks. It is this that makes BNPL schemes a popular choice for both real customers and criminals.
Bank drops are bank accounts opened by scammers with stolen Fullz information. These accounts are used by criminals to facilitate their fraudulent activity, allowing them to avoid being caught by banks and authorities. Bank drops allow these fraudsters to receive and transfer illegal funds.
With the selected bank, fraudsters will utilize said information, all while taking extra measures to avoid attracting unwanted attention. For example, such individuals usually have burner phones and use Virtual Private Networks and Tor browsers to eliminate detection. With these in place, criminals are almost untraceable.
As with loan fraud, criminals will carry out perfectly legal transactions to seem legitimate, allowing them to continue to take advantage of the situation.
How to Prevent Your Credit Card From Being Cloned?
Businesses and banks do have some safeguards against the ever-growing world of fraud. One of the biggest successes in this area is the development of EMV microchips. Europay, Mastercard, and Visa cards are now manufactured with encrypted microchips to combat the vulnerabilities of magnetic strips. This makes it increasingly difficult for fraudsters to obtain card information and clone credit cards.
Many payment terminals are built to accept both contactless or Chip and PIN (EMV) and magnetic strip (swipe) payments, and it is at the customer’s discretion as to which method they opt for. At the point of sale, employees can attempt to educate customers on more secure methods of payment.
Banks can also protect their customers by understanding their spending habits. When they can see how and where clients usually spend their money, it will help them spot anomalies in the future. Banks will search for suspicious activity via their customers’ profiles using such categories as payment type, time and date of transactions, frequency of use, and location.
Merchants can also help combat card fraud by being aware of Point of Sale vulnerabilities and adjusting them to make cloning cards harder. Merchants can make terminals more secure by accommodating EMV payments and abolishing magnetic strip payment methods.
Individual card users also have a responsibility to tackle fraud. By regularly checking your account using online banking, you can easily spot any unfamiliar activity. Frequently updating passwords and having different ones for different accounts will also improve security.
Lastly, people should be aware of phishing and avoid any interaction with suspicious texts or emails. If you are unsure as to the legitimacy of a message you receive from a company, you can check any interaction history via their websites.
This article has covered the highly intricate topic of cloned credit cards, how they are cloned, their purpose, and also how to best protect yourself from fraudsters. Sadly, it is an impossible task to maintain control and prevent fraud from happening entirely. As potential victims continue to store their valuable information online, these criminals have so much at their disposal. However, after reading this article, you will hopefully be more vigilant and educated should you ever run into fraudulent activity.