Connecticut latest target of thieves, new technology sought

Financial consultant Doug Nicholas says that Connecticut bank cardholders have recently become the latest soft target for fraudsters. Matters are now under investigation by the US Secret Service. Connecticut along with 10 other states has been prime targets of the thieves since the start of the year. The US Secret Service says that what the thieves do is use skimming devices installed at ATMs or cash registers across the country to tamper with credit and debit cards and gather the PIN numbers as well as the all-important authorization codes.

Retail segment fraud practice researcher Oliver Mertile said that the US, with Connecticut as the latest target, may experience more of credit card security problems in the future with other different states becoming a place where the thieves` technologies cannot be countered by authorities. For this, he suggests that authorities adopt the same technologies present in Canada, China, Indonesia, Mexico, and Saudi Arabia which use the EMV cards. The cards have encrypted forms where account details are stored in smart chips.

Mertile further says that the country`s maintenance of the magnetic stripe technology for four decades now could mean even more vulnerability because the fraudsters have surpassed security mechanisms with their more advanced technologies.

The security features of the encryption technology present in the countries mentioned above could largely decrease the number of frauds should the financial institutions adopt the EMV cards, Mertile argues. At best, the experts also say that a new technology will prevent huge amount of losses incurred by individuals and institutions due to their vulnerabilities in credit security or protection.

Mertile adds that skimming devices installed at ATMs for the PIN and authorization codes also led to the production of many fake cards sold on the black market. The losses incurred by banks from the illegal activities amount to $200, 000. The stolen account information via the skimming devices is also easily transferable which costs the financial institutions more.

The technologies that the fraudsters use, Nicholas says, can be bought on the internet at 10 dollars and 35 dollars for the encoder obtaining data from the magnetic stripe. Transferring information on other cards can then be easily done to produce fake counterparts. For this, Nicholas suggests that in order to avoid more cardholders from being victimized due to the existing fake and cloned cards, a new technology must be adopted.

Doug Nicholas

Doug Nicholas, a financial consultant by profession with a Masters degree in International Business from Brown University, is also an ardent writer. Though he has a full time job at one of the companies listed on Wall Street, he does manage to squeeze in time to follow his passion. He puts his ideas to words in his articles related to finance and business.