Secret Service Warns Of Credit Card Chip Scheme, Report Says
-- The U.S. Secret Service is reportedly warning banks about a new scam that is targeting the chips in credit cards sent through the mail.
According to a report on KrebsOnSecurity.com, the scheme involves criminals who intercept letters containing debit cards that use chip technology. The scammers swap out the new chip with an old one and then send the letter back out to its original destination.
Once the actual card holder activates the new card, criminals are able to use the stolen chip to access their victim's account and drain their funds. "The corporate office activates the debit payment card; however, their payment card is inoperable thanks to the old chip," internet security writer Brian Krebs explains.
The Secret Service memo, reportedly sent to financial institutions in March, did not detail when or where the cards are being stolen and tampered with. "It could well involve U.S. Postal Service employees... or perhaps the thieves are somehow gaining access to company mailboxes directly," Krebs writes. "Either way, this alert shows the extent to which some thieves will go to target high-value customers."
The scheme is allegedly focused on cards being issued to businesses or corporations that would presumably have larger bank accounts to drain. "I think the key thing to know is no technology is perfect," consumer advocate Abraham Scarr said, via CBS New York.
Credit card chips were created to defend against skimming devices which steal information through the magnetic strip on the back of the card. Security experts say criminals have already adapted their technology to read the chips as well.
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