'Skimming' scam targeting gas pumps

10:48 PM, May 28, 2013   |    comments
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White Pine police are investigating a "skimming" scam at area gas pumps

A relatively new type of banking fraud is trending around the country, and dozens of East Tennesseans have become recent victims.

The White Pine Police Department reports more than two dozen local cases of stolen banking information since May 21st.

"We have seen a magnitude of reports coming in," said Detective Chad Cotter. "Most [of the] time you get one or two, but you never see 20 to 30 different cases coming in at one time."

Cotter said their investigation shows the fraud is likely happening at area gas pumps, by a tactic called "skimming."

The FBI describes "skimming" as planting an electronic device on a machine that reads bank card information from a magnetic strip, like an ATM or gas pump. Often, the device is installed on top of the original card reader, and looks identical to the real thing. The fake device will store the card's information, allowing criminals to access it later. On some of the more sophisticated versions, a hidden camera will also record the customer typing in a pin number.

In a 2011 report, the FBI said skimming is a growing criminal activity.

Cotter explained how the thieves put that tactic to use in White Pine.

"When you put your credit card in or your debit card in, it's actually reading the information. On this particular case, it's not only reading their card number, it's reading their pin number. They're going to ATM machines with your pin number and withdrawing money from the ATM machines," he said.

White Pine police aren't ready to definitively name which gas stations were hit, but believe pumps near Interstate 81 were the likely targets.

Emily Townsend first learned her banking information had been compromised when she tried to use her debit card and it was declined. Once she checked her accounts, she learned thousands of dollars went missing.

"They used our debit card about 20 times for withdrawals," she said.

Townsend quickly contacted her bank to report the fraud, then joined the growing list of people who filed a police report in White Pine. She said she hopes people are paying attention to what's happening in her community, and take the steps to protect themselves.

"I hope that it puts knowledge out there for people to be aware, and at some point, could put an end to this," she said.

Cotter estimated the total amount stolen from White Pine residents is near $40,000, and  said it can be very difficult for local police departments to investigate fraud on that level.

"Right now, other than getting the federal authorities involved, I don't have a good answer for it," he said.

Cotter encouraged any victims who haven't filed a report to do so.

Because the skimmers are hidden so well, Cotter said it is difficult for gas stations to catch them and nearly impossible to prevent the theft. Instead, he advised customers to swipe with a credit card, because those usually have better fraud protection than debit cards. He also encouraged people to regularly check their bank accounts for errors.

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