If you’ve ever shopped online, you’ve probably had to worry about the security of your credit card information and whether it could be stolen by a malicious hacker.
Cloned credit cards refer to credit cards that have been created using information taken from a person’s real credit card, usually obtained through nefarious means such as skimming or dumpster diving.
While the chances are slim that someone could steal your number, spend thousands of dollars in purchases in just one day, and then disappear completely, the possibility still exists.
In addition to those worries, though, there’s another fear that online shoppers may have, and that’s being sold an item with a cloned credit card attached to it. This guide covers everything that you need to know about cloned credit cards.
What Are Cloned Credit Cards?
Many people are still not aware of the existence of cloned credit cards. This is because they belong to the remit of a secretive underground community. A cloned credit card is a card where the cardholder’s name has been replaced with someone else’s to create a new and different account.
You may be wondering why people would want to clone a credit card. Generally, they clone cards in order to fraudulently purchase items or make money by getting cash advances with the new account that has been created.
Credit card cloning happens when someone steals information from your credit card and makes unauthorized purchases.
You could be liable if you fail to report the loss or theft of your credit card before any unauthorized charges occur, so victims of credit card cloning can save themselves money by reporting the theft right away and getting a new credit card number issued to them.
Read on to learn more about credit card cloning and how to avoid it.
How Do Hackers Sell Cloned Credit Cards on the Darknet
Hackers sell cloned credit cards on the darknet, and this stolen credit card information is then reprogrammed into the magnetic strip of a new, blank card. When this is done, they mail the card to a buyer who can use the credit card in an ATM or at any retail store.
This means that hackers do not need access to the physical bank account to steal money. All they need is a valid credit card number and the ability to create a magnetic strip. They then sell these cards for just a few dollars.
Credit cards can be cloned through the following process:
- Someone with direct access to credit cards, such as a cashier or server at a restaurant, is sought out as an accomplice.
- They are handed a skimmer, a little device designed to record card information. This can be a separate device or a card reader add-on.
- The consumer presents their card as payment to the accomplice.
- The accomplice swipes the card through the POS terminal used for regular payment and then the card skimmer.
- The accomplice returns the card to the unknowing client.
- The thief transfers the information obtained by the skimmer to a blank card’s magnetic strip, which may or may not be a stolen card.
- The fake card can then be used in the same manner as a real card or for further fraud, for example, for carding.
How Damps Are Recorded
A chip card, also known as an EMV card, contains personal information and is embedded in the face of the card. When inserted into a chip reader, this chip encrypts and transmits your credit card number for authorization.
The integrated circuit and security codes make it more difficult for fraudsters to steal your identity when they steal your credit card number and use it to create fraudulent cards.
Once you have been issued a new card with a new account number, destroy your old card by cutting it up or crushing it so that no one can use it to commit fraud.
If you have doubts about the authenticity of your credit cards, contact the issuing bank immediately so they can verify their validity.
Carding forums are online communities where people can share knowledge and technical expertise about the illegal trade in stolen debit or credit card information. These websites are used by scammers to buy and sell information that was obtained illegally.
Card-not-present sales continue to be a major source of income for card thieves and are frequently discussed on carding forums despite new defensive measures like Chip and PIN that make it more challenging to use stolen cards in point-of-sale transactions.
Dump Credit Card
When a thief creates an unauthorized digital copy of a credit card, it is known as a credit card dump. It is carried out either by manually copying data from the card or by breaking into the payment network of the issuer.
This method has been around for a while, but in recent years its scope has greatly increased, with some attacks targeting millions of people.
Criminals that steal credit card information use the slang term “full information” or “fullz.” This alludes to the set of data that includes a user’s true name, address, and method of identification. The data is employed in monetary fraud and identity theft. The buyer of the “fullz” is not involved in the operations.
Carding typically entails buying gift cards that can then be used to buy other gift cards that can, in turn, be used to buy relatively hard-to-trace things.
The products are then frequently sold again elsewhere or online. Carding information is also used to help with identity theft and money laundering. Here are some common examples of where cloned credit cards are used:
As the name suggests, the resale of information entails reselling the data collected through carding to others, who will subsequently use it in various illegal activities. This is one of the simplest ways to do carding.
In 2004, it was discovered that a well-known carding forum and a frequently used online payment system had cracked into banks and transfer systems, enabling the processing of illegal cash and money laundering.
The people in charge of the payment site handed up many illicit identities and operations under pressure to comply, but they were ultimately found guilty of money laundering.
How Can I Protect Myself from Falling Prey to Cloned Credit Cards?
There are several ways that you can protect yourself from credit card fraud or skimming:
- For starters, cover your hand with your other hand when you enter your PIN into an ATM and use cash instead of debit or credit cards when possible
- Check your bank account regularly for any fraudulent transactions
- Call the company if you notice anything strange on your bank statement that could indicate fraud, like a withdrawal for more than the amount in your account at the time of purchase
- Lastly, be sure to back up all your data since this includes personal banking information as well
What may seem like minor precautions now will save you from major headaches later. You’ll have to get used to checking your statements carefully; it’s part of being responsible for your finances.
Should I Cancel My Old Card and Get a New One?
If you find that your credit card has been cloned and someone has used it to make a purchase, but you haven’t lost or forgotten the card in question, it’s best to cancel your old card and get a new one.
If someone who was responsible for a card account is no longer at your company, for example, then canceling the old card may be best since anyone with knowledge of the old credit card number would be able to spend money using the account.
What Do Financial Institutions Do to Minimize Credit Card Cloning?
All major financial institutions (banks, credit unions, etc.) use a variety of methods to monitor your card usage and protect you from cloning.
So, if someone tries to use your card information to make a purchase at the mall and they don’t match what’s in the bank’s records, the bank will flag it as fraud or attempted fraud.
It is important that you notify your bank immediately if you suspect fraudulent activity on your account. In many cases, even if your card number has been stolen, banks can issue a new one for free so that no one else can take advantage of it.
Here are several tried and tested methods that can protect you from the cloned credit card practice:
Magnetic Bars Are Replaced by EMV Microchips
Compared to magnetic stripe cards, these have more sophisticated iCVV values, and hackers cannot copy them.
However, according to 2020 publications on Security Week, hackers have discovered other strategies to attack this sort of card as well as ways to copy EMV chip data to magnetic stripes, thus duplicating the card. The uninitiated may not realize how much information cloned credit cards can disclose.
Payment processors and card issuers gain important information about each cardholder’s “typical” behavior by creating customer profiles, frequently utilizing machine learning and sophisticated algorithms to create cloned credit cards.
This allows them to identify any questionable actions and follow up with the customer. A straightforward example of this is when a customer gets a call from their bank asking them to confirm that they swiped their card in an area of the country they haven’t been to previously.
Legislation and Liability
Due to laws from the government, card issuers have a financial stake in combating fraud because they are typically required to pay for funds stolen from cloned credit cards.
This creates an additional, significant incentive for banks and other organizations that offer payment cards to the general public to secure their procedures and invest in new technology to combat fraud as effectively as possible.
The actual law on this differs from country to country, but in most places, these services can be used for any disputed transactions, increasing the pressure on card firms.
It is beneficial for everyone if the general population is made an ally in the struggle against credit and debit card theft.
Major card issuers, banks, and fintech companies, as well as national and municipal government agencies like Europol in Europe, have launched campaigns to inform the public about various sorts of card-related fraud.
The US could follow the same example and educate the public on cloned cards and credit card theft.
What Are the Consequences of Carding?
Most states in the US consider it a misdemeanor to use a stolen credit or debit card for purchases. Carders who are found guilty risk up to 15 years in jail and charges of up to $25,000 in addition to potential restitution.
The potential penalties for cloned credit cards increase significantly if the carding is related to money laundering.