Market research firm Gartner Vice President Avivah Litan warns credit cardholders and companies of the latest scam called "flash attack". The "flash attack" is about cases of stolen credit card identities where a cardholder's information can be used by thieves to open up new and additional credit card accounts.
Authorities say that losses in such attacks can amount to as much as $100,000. Aside from this, victims of "flash attacks" would also find it difficult to rebuild good credit scores in the years to come once additional accounts under their credit card IDs are created without their knowledge.
In order to prevent cardholders from being victimized, Litan's warning on the new credit card scam comes with information for the public on the way "flash attacks" work. Litan says that education for the credit cardholders regarding the latest scam that might turn them into victims is necessary in the face of growing problems in the credit card industry.
He explains that the "flash attack" process starts with the use of skimmer devices enclosed by the thieves across different automatic teller machines (ATMs). The device then arrests data from the credit cards inserted in ATMs while an accompanying tiny camera which is situated in a hidden spot to the cardholder but has access to the ATM monitor takes shots of personal identification numbers (PIN) and zip codes.
After which, the thieves already have access to your credit and debit card information that would be used to create more additional credit and debit card accounts.
Litan adds that the additional accounts created also mean new, actual credit and debit cards produced and fabricated which are given to money mules. The money mules' task is to use the cards across ATMs and withdraw money. With the money mules' electronic know-how, they can withdraw large sums of money all at the same time without fear of their transactions being weakened by fraud detection.
Litan says that a solution available in such cases presently as a form of credit card fraud prevention strategy is very expensive. He describes the strategy as involving the crucial identification of the "point of compromise" which means knowing which ATMs had skimming devices and cameras attached to them that led to the fraud.
When authorities successfully locate these "points of compromise", all credit cards used in those ATMs will immediately be closed accounts. This will preclude the creation of additional accounts with the same credit or debit card data and make it impossible for money mules to transfer or withdraw money.
With this expensive strategy, Litan concludes that authorities are yet to find out more cost-effective but sure-fire ways of targeting the thieves.