PC Magazine reports on a new tactic that criminals are using to get access to debit cards and drain consumers’ accounts. The U.S. Secret Service is alerting financial institutions that thieves are intercepting cards in the mail, popping out the chip and replacing it with some other chip so the recipient is none the wiser:
“… the US Secret Service is warning financial institutions about this new type of mass debit card fraud. The criminals are targeting large corporations who have new debit cards sent to them in a bulk package directly from a bank/financial institution. Those packages are intercepted, the chips removed from the new cards using a heat source to melt the glue, and old chips attached to replace them.”
The truly sneaky part of this is that the criminal makes the cardholder activate the chip for them:
“When the package is mailed on to its intended destination, the cards look fine and so they get activated. The clever bit here is, the new cards make it through the activation process, but can’t be used because the attached chip doesn’t match. However, because the card is now active, the stolen chips from the cards do work and allow the criminals to drain those account before anyone realizes something is wrong.”
If this is happening with debit cards, it is most likely also happening with credit cards. This is one point in the advantage column for instant issue.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
Read the quoted story here
