Feds warn of gas pump scheme that can drain a victim’s bank account

By Ricardo Torres-Cortez

Published Friday, Nov. 11, 2016 | 2 a.m.

Updated Friday, Nov. 11, 2016 | 12:39 p.m.

In a matter of seconds, payment card fraudsters can overlay a fake facade onto a gas pump or ATM machine, in a scheme that can wipe out bank accounts and locally generate them tens of millions of dollars each month.

This was emphasized Thursday to a group of local business leaders in a presentation made to them by FBI and Metro Police representatives, who provided tips on how to prevent being cheated.

The businesspeople form part of Infragard, an FBI program geared to address national infrastructure protection, according to the federal agency.

Criminals have swiftly kept up with safeguards implemented to protect debit and credit card users from fraud, such as encrypted chip technology, FBI Special Agent Fred Bradford said from the National Atomic Testing Museum where the presentation was made.

In October alone, Metro confiscated 23 skimmers, or card readers, likely saving consumers, merchants and banks up to $46 million, Metro detective Jeff Grace said. Each skimmer can generate fraudsters up to $2 million. Each card generates $2,000 to $4,000.

The way the scheme occurs is simple.

Step 1: The internet facilitates the crime by teaching thieves how to build facades or skimmers and buy the necessary parts to build them, Bradford said. Not surprisingly, they themselves often don't use credit cards to purchase their tools, opting for bitcoin or services like PayPal.

Step 2: They identify what machine they're going to target. Grace said it's usually older gas pumps, which due to technological advances makes them more vulnerable.

Step 3: Each time a consumer swipes their card on the skimmer, it saves its information, which is then available to the criminals, Bradford said.

Step 4: The criminals retrieve that information. In the past, they had to physically remove the skimmer. But here's where Bluetooth technology comes into play. The suspects now simply need to be around the machine and can wirelessly reap the data.

Step 5: Grace said criminals can wipe out bank accounts out of more money than is available to them. They do this by finding online merchants that initially only take $1 from a card and the rest later. Multiple $1 purchases won't immediately alert companies what's going on until it's too late.

How can a consumer avoid being ripped off?

Bradford said the first line of defense is awareness. Card users should be aware of the machines they use, the facades sometimes look obviously fake. He recommended against using debit cards on gas stations. If drivers prefer to pay outside, he said opting out of entering your pin and choosing to pay credit can protect you.

Every day of the year, but especially during the upcoming shopping season, card users should check their bank accounts daily to evaluate every single transaction made, Bradford said. He also recommended often checking with credit bureaus and subscribing to fraud alert services.

Metro has success countering the crime and stays on top of investigations, which can be overwhelming due to the amount of resources needed, Grace said. But still, the scheme robs the local community of an estimated $100 million a month.

Other tips from Grace to prevent fraud:

Use lower-limit credit cards for daily uses

When the opportunity presents itself, opt out of using a personal identification number

Don't link debit cards to automatic payments and instead use payment services

For more information on the FBI's Infragard program, visit infragard.org.

CORRECTION: This story has been updated to correct two incorrect attributions. | (November 11, 2016)