Teenager Sentenced for Card SkimmingInsider Scams a Growing Trend, Experts Say
Card-skimming expert and fraud consultant Jerry Silva says the case highlights just how easy it is for insiders to perpetrate card fraud, especially in a retail environment.
"It truly is remarkable," Silva says. "Even if we protect the ATMs and POS devices, insider fraud like this will take place due to the ease with which criminals can get their hands on the appropriate devices. This is an industry that clearly needs an elegant and innovative solution (not EMV) that can at least make it an order of magnitude harder for skimmers to succeed."
Silva argues that the problem "isn't big enough at top tier-banks to warrant any kind of financial disclosure, much less a preventive response. They just write it off as the cost of doing business."
Transactions MonitoredIn the McDonald's incident, the teen's card-fraud scheme was foiled before exceeding $13,000 in losses after transaction monitoring traced the fraud. Detectives connected the dots and linked fraud to the Olympia McDonald's when contacted by the Washington State Employees Credit Union about fraudulent transactions hitting member accounts. The credit union found one commonality: All of the compromised cards had been used at the same McDonald's. McDonald's management later confirmed the juvenile suspect had worked the drive-thru every time one of the compromised cards had been used.
The teenager used the stolen card numbers, which he collected with a handheld skimming device, to buy gift cards at retail stores such as Walmart and Toys R Us, according to a news report. With the fraudulently purchased gift cards, he allegedly bought about $13,000 worth of merchandise that he later sold on Craigslist and eBay for profit.
The purchases the teenager made included iPads, computers, video game systems and digital cameras, according to the Thurston County Prosecuting Attorney's Office.
The teen has been in custody since Nov. 16, after his parents refused to post bail. On Monday, he pleaded guilty to two juvenile counts of forgery and two juvenile counts of identity theft. As part of his sentence, the court has asked that he pay restitution to the victims whose cards were compromised.
The investigation is ongoing because other suspects may be involved.