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St. Petersburg bucks national ‘skimming’ trend

Mark Parker



St. Petersburg police found this credit card skimmer inside of 7-11 gas station in 2020. Photo: SPPD, Facebook.

According to FICO, credit and debit card skimming fraud “is back with a vengeance,” with incidents increasing by 700% in the first half of 2022.

However, the St. Petersburg Police Department didn’t receive a single skimming device complaint last year.

Skimming fraud involves criminals installing illegal devices on ATMs, point-of-sale terminals or gas pumps to steal credit card data. The FBI estimates skimming costs businesses and customers $1 billion annually.

Monica Eaton, founder of Clearwater-based Chargebacks911, advises businesses of all sizes to implement fraud prevention tactics to stop scammers and avoid unnecessary chargeback fees. She noted it costs a vendor $3.75 per disputed dollar every time a consumer files a fraudulent purchase claim.

“Part of it is new technology,” said Eaton of last year’s increase. “So, it’s always a task of trying to stay ahead.”

Monica Eaton, founder of Clearwater-based Chargebacks911. Photo provided.

Chargebacks911 (CB911) is a data-driven platform that provides payment dispute prevention and intervention technology. According to its website, CB911 is the first global company dedicated to helping merchants mitigate post-transactional fraud and safeguards over 2.4 billion transactions annually from clients in 87 countries.

Eaton explained that shrinking margins played a role in the resurgence of skimming fraud, as many companies remain reluctant to invest in new terminals. She said replacing equipment that reads magnetic strips rather than microchips is cost-prohibitive for many businesses.

She believes the pandemic also played a role in skimming fraud temporarily decreasing throughout the nation.

“For two years, we didn’t have that traffic coming through stores,” said Eaton. “So, we saw that type of fraud decrease substantially because there just wasn’t an opportunity for it.”

Yolanda Fernandez, SPPD spokesperson, called the lack of skimming reports in 2022 “unusual.” She said the department receives complaints periodically, often from a small group targeting a specific region.

She believes public awareness and enforcement efforts are paying dividends. While it might “be a headache,” Fernandez encourages the public to frequently check their accounts and pay inside a store rather than at a gas station pump.

“We normally see a few of these a year,” she said. “Last year, we didn’t see any. Sometimes you don’t know why crime numbers go up and down, but that’s where we’re at now.”

The consumer is the obvious victim of skimming, and FICO noted that they typically do not realize anything is amiss until charges show on bank accounts or their money disappears. However, Eaton said there is no liability protection for merchants, and it impacts businesses “in a very dramatic way.”

She relayed that store owners lose out on any merchandise purchased or potential revenue, and incur a fine or fee. Eaton said chargebacks typically take 60-90 days to process after a transaction, increasing the negative impact on businesses operating on tight profit margins – some as low as 2%.

“You’re dependent on that cash flow to run your business,” she added. “They don’t have a lot of extra breathing room.”

An SPPD officer displays a skimming device that fits over a card reader. Photo: Twitter.

Eaton said her company “absolutely” notices a dramatic increase in credit card fraud around the winter holidays. However, she noted that stakeholders typically do not feel the effects until the first quarter of the following year.

Eaton said people tend to overspend through November and December, and the boost in online activity creates additional opportunities for fraudsters. Consumers also fall victim to the promotions and gimmicks “that sound too good to be true,” and she said the giving spirit of the holidays leads to charitable fraud.

“Fraudulent purchases with stolen card information doesn’t just hurt the cardholder,” said Eaton. “It hurts everyone involved in the purchasing process.”

Eaton advises eCommerce businesses to implement the following fraud prevention measures:

  • Compare shipping, billing and IP addresses for differences.
  • Utilize address verification services (AVS) to compare the one provided by the customer with the one on file with the issuing bank.
  • Watch for patterns, like multiple failed transaction attempts using various credit card numbers.
  • Create a “blacklist” of phone numbers, email addresses, IP addresses and billing addresses used in fraudulent transactions.

The FBI offers these tips for consumers to avoid skimming fraud:

  • Inspect ATMs and card readers, and do not use the devices if anything seems unusual.
  • Pull at the edges of a keypad before entering a PIN, and cover the keypad to prevent cameras from recording your entry.
  • Be alert for skimming devices in tourist areas, which are popular targets.
  • Choose a fuel pump close to the store, and use a credit card instead of a debit card.
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