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Chip-enabled cards were designed to prevent instances of identity theft and fraud by adding an additional layer of security. That is, until criminals began credit card “shimming.”
Shimming is an updated version of skimming that reads credit card chip information, allowing the card to be duplicated or its information to be sold illegally.
Before chip-enabled cards, skimming was a method of identity theft that would read a card’s magnetic stripe. Shimming is largely the same concept, but instead of reading the stripe, skimmers read the information in the card’s chip.
Both skimming and shimming require the fraudster to attach or insert a mechanism into a card reader in order to gather the information. These can be tricky to spot for unsuspecting consumers, but understanding how they work will help you be more aware the next time you insert your credit or debit card.
Credit card shimming works by inserting a small device called a “shim” into a card reader. Unlike skimmers—which were typically bulky and easily detectable if you knew what to look for—shims are small and subtle.
Whenever a chip-enabled card is inserted into the reader, the shim collects its data. Then, the scammer collects this data by inserting what looks like a regular card into the reader. This makes it difficult to spot suspicious activity, as it appears the scammer is making a regular transaction.
As the technology currently stands, scammers aren’t able to create an exact duplicate of chip-enabled cards based on the shimming data they collect. They are, however, able to create a version of the card with a magnetic stripe only—which many retailers still accept.
It can be quite difficult to spot a credit card shimmer or skimmer, but there are key questions to help you determine your risk at any transaction:
If you’re doubtful about whether an ATM has been affected, it’s best to try another ATM or go to a bank teller if possible. If you’re unsure about a transaction, consider paying in cash or using a contactless payment method, such as your mobile device’s virtual credit card wallet.
While identity theft is not always avoidable, there are some habits you can incorporate to make sure you’re as protected as possible.
Banks have some fraud detection technology in place that may catch suspicious activity before it becomes problematic, but it doesn’t catch everything. Luckily, the Fair Credit Billing Act says you’re not responsible for any unauthorized charges once you report your card as stolen. So, if you suspect you’ve fallen victim to skimming or shimming, you’ll want to act swiftly.
Shimmers are devices that scan the chip in credit cards to replicate and store financial data. Someone can use this to create a knockoff of your card and sell your financial information.
Credit card skimming and shimming are both activities that lift the financial information from your credit card, but they target different places where the information is stored. Credit card skimmers target the magnetic strip on traditional credit cards, while shimmers target the chip you’ll find in newer credit cards.
Chip cards can be shimmed because shimmers target chips specifically. As of the writing of this article, contactless payments are the most secure way to use your cards.
Card skimmers and shimmers are made to look exactly like the regular ATM or card reader. Look for signs of poor craftsmanship or misalignment in the credit card slot because this means it may have been tampered with.
Taking extra safety precautions may seem like a burden at first, but protecting your finances is worth the effort. Remember to pause before you make any transaction to ensure the conditions are safe, even if you’re in a hurry.
Identity theft and fraud can temporarily wreak havoc on your credit, but the effects don’t have to be permanently devastating. Work with a credit repair firm to help challenge any inaccurate items caused by a scammer to help you work to get your credit back to where it should be.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
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