The technology used by the credit and debit cards of the US customers involves saving the encrypted data on a magnetic stripe behind the card. This information remains static from transaction to transaction, which makes the US credit card holders an easy target for many thieves globally. Credit card thieves who had manipulated the card readers at Aldi stores targeted Connecticut and 10 more states very recently. The fake card readers were installed by the thieves at the cash registers. This helped them steal information about bank data, PIN numbers as well as authorization codes of customers, something that is supposed to be very confidential.
Many researchers of frauds in the payment systems are of the opinions that the country could become an easy target for the fraudsters if the credit card issuers do not switch to the EMV standards, something that has been adopted in a lot of other developed countries. The EMV standard replaces the magnetic stripe with a smart chip. It stands for Europay, MasterCard and Visa, the companies that developed the system to combat fraudsters.
Smart card technology endorsers say that this chip technology would have definitely helped avert the breach that took place at Aldi stores. Many credit card thieves are targeting the country by installing electronic skimming devices at retail stores, gas stations as well as ATMs. Even pinhole cameras are being installed by these fraudsters in ATMs. Another report has shown that there is a lot of price being paid in the black market for the information of US bank cards, amongst other stolen bank information that is bought and sold.
A bank card can also be duplicated easily using the data encrypted on a magnetic stripe such as authorization codes, the name of the account holder and the card number. A card reader doesn't cost more than 10 dollars and an encoder costs only 35 dollars. It is useful in capturing the confidential data on the magnetic stripe. Credit card thieves can use these to create a counterfeit and the customer would never know until he or she has seen the monthly payment. Over the last two years, this kind of thievery called skimming, has occurred a lot. The scope and scale of the frauds has also risen alarmingly and it is now possible for fraudsters to sit at home with a laptop and rob a lot of money by tampering card readers or hacking into those systems that handle the payments of banks cards.