DENVER (KDVR) — Card skimming is a problem across the United States. It is estimated that skimming costs financial institutions and consumers more than $1 billion each year, according to the Federal Bureau of Investigation.
But the scamming devices aren’t foolproof.
Card skimming occurs when a scammer transfers a device onto such point-of-sale terminals as ATMs or gas station pumps to steal someone’s card information.
The way it works is a criminal inserts a fake card reader cap over the actual card reader. This device has a memory chip to store your data.
Denver police officer finds credit card skimmer on ATM in convenience store 
A card skimmer found at a 7-Eleven ATM in Greeley (Greeley Police Department) 
Sgt. Dan Courtenay with the Aurora Police Department said scammers are finding ways to plant card skimmers inside gas pumps and ATMs, so there’s no way to tell from the outside. (Aurora Police Department via KDVR) 
A small camera linked to a card skimmer found at a 7-Eleven ATM in Greeley (Greeley Police Department)
When someone inserts their card into a card reader, the device scans the magnetic strip on your card. It transfers the information wirelessly to the scammer, according to the Denver Police Department. Usually, a small camera is installed that watches you type your PIN information, which gives them access to your bank account.
Criminals use the data to create fake debit or credit cards to steal from customer accounts, said the FBI. Sometimes, this information is even sold on the dark web.
When it comes to contactless payment, it’s not as simple.
Apple Pay encrypts card data
Apple Pay offers an extra layer of protection. According to Apple, the data on Apple Pay is encrypted to prevent fraud.
When you apply for Apple Pay, your device is given an encrypted account number that can only be unlocked by your bank. Apple doesn’t even have access to your actual card number.
When you pay for something with Apple Pay, it’s not with your card number, but with an encrypted code that’s tied to your device only.
While card skimming only works by swiping data from the magnetic strip on your card, there are other ways card information can be stolen.
Apple Pay takes the extra step of encrypting the data so that your actual card information isn’t even in your iCloud.
With that being said, many gas stations don’t allow contactless payment, but there are other ways you can avoid card skimming.
How can you spot a skimming device?
Before putting your card into a reader, the FBI says, there are some easy and effective ways to protect your information.
- Inspect the reader and look for any loose parts or damage. Scratches or damage to adhesive tape can also be indicators of tampering.
- Give the skimmer a light shake, and if it feels loose, tell an employee.
- Cover the keypad with one hand to block any hidden cameras.
- To be extra careful, pay with cash.
Police also warned about other, harder-to-detect skimming devices. These newer devices cannot be detected from the outside.
While criminals are creative and fully protecting your card information can be nearly impossible, there are ways to decrease your chances of card skimming.