Is Your Credit Card Being Skimmed?

id identity theft credit cards fraud CBS/AP

It was after Lynn Janatpour filled the tank at a San Mateo, Calif. gas station that she really got taken for a ride.

As CBS News Correspondent Jerry Bowen reports, that's when thieves started siphoning money out of her bank account.

"They made all the withdrawals within three or four days, and it was $1,800 or something like that, total," she says.

And she wasn't alone. In all, 80 customers were scammed. And even the station owner was in the dark.

Mounir Kardosh, the owner, estimates that the thieves made away with $200,000.

A part-time clerk had used a device called a skimmer on the customers' ATM cards. It records the names, account numbers and other identifying information from the magnetic stripes to be downloaded onto a personal computer later. And that data can then be used to make phony cards.

California prosecutor Howard Wise tells Bowen, "At that time, frankly, I thought skimmers were an urban myth."

Wise became a believer after his own credit card was skimmed. He is an identity theft victim who also happens to prosecute fraud cases in Ventura, Calif.

"You could be compromised anywhere. Anywhere you give your credit card and you lose sight of it, it's possible to be skimmed," he says.

What is alarming to investigators now is how tiny the devices have become, how easy they are to use and easy to buy over the Internet -- no questions asked.

As bad as the actual fraud is for consumers, there's an even more sinister side to this scam. Law enforcement agents have linked the skimmers to terrorists.

A personal trainer at a Boston fitness club was charged with skimming credit card data that ultimately went to the two Algerian nationals convicted of planning the bombing of Los Angeles International Airport.

Now the legitimate card scanner manufacturers are trying to get credit card companies to sign on to their new technology.

"It creates what we like to think of as a snowflake. No two cards, no two pieces of plastic, no two mag stripes are identical," explains Lou Struett of Magtek.

Each real card has a unique scatter pattern of magnetic particles. The new card reader matches that pattern to the information contained on the stripe.

A high score means "real" while a low score signals a phony.

Meanwhile, customers back at the San Mateo gas station still can't believe they got scammed. And neither can the owner -- because the accused clerk was a distant relative.

"To find out he was the person who stabbed me in the back. It hurts, but it's facts of life," says Kardosh.

The fact for now is that anyone who uses a credit card is still vulnerable.
  • Sue Chan

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