And growing numbers of them, according to a Secret Service training tape, are now being scammed, reports CBS News Correspondent Jim Stewart. The tape shows an agent pretending to be a waiter skimming a credit card on a tiny scanner.
He quickly captures your name, address and credit-card code off the magnetic strip, and before you've finished dessert, can sell it over the Internet. Overseas crime groups are the biggest customers for such data, says the service.
"They're recruiting waiters, bus boys, cashiers, front-desk employees at hotels, places where you have to give your card up for a moment, lose sight of it, and they have the ability to skim through it." says Greg Regan of the Secret Service's Financial Crimes Division.
It's the latest criminal innovation in credit-card fraud. Credit-card companies get stuck with the bogus charges, but pass them along in higher interest rates. The industry thought it had solved the problem with the magnetic strip.
"On the front of the card here is your account number, your expiration date and the name of the account holder," says Regan. "All that is included on the magnetic strip." Along with the secret code? "That's right along with the three-digit code, which is nowhere on the front of the card."
But when that waiter skimmed the card, he captured all that data including the code. And as far as the bank is concerned, any card with the code is a good card.
Far more money is lost every year from cards that are lost or stolen outright, but that's not the point, says the Secret Service. Their fear is that U.S. banks and credit-card bandits are in a technology race, and for the moment, the bandits are pulling ahead.