Gas stations may be more dangerous than they appear: One in five millennials suspect they've lost money when paying to fill up their tanks because of a fraud called skimming.
Skimming is a crime that occurs when fraudsters attach a device called a skimmer to the card reader and grab data off the magnetic strip on a credit card or debit card. Gas stations are a prime location for this type of scam, Matt Schulz, chief industry analyst at CompareCards, tells CNBC Make It, because they are not required to update their card readers to the safer EMV chip cards until October 2020.
"Gas stations are the lowest-hanging fruit for bad guys when it comes to skimming," Schulz says. In fact, 15 percent of Americans who purchased gas in the last month believe they've been a victim of skimming at the pump, according to a new survey of 1,000 people from CompareCards.
Millennials are more likely to say they've been scammed. Just over 20 percent of millennials suspect that they've been victims of skimming at the pump in the last year. That's compared to about 15 percent of Gen-Xers and just 8 percent of Baby Boomers.
It likely comes down to awareness, Schulz says, adding millennials are very "plugged in" when it comes to news and trends. Millennials are also the group most likely to monitor their finances and recognize when something is wrong. "You're much more likely to watch every single penny when you have fewer pennies," he says.
Overall, fraudsters stole the identities of more than 1.3 million people last year, netting about $16.8 billion from American consumers, according to the 2018 Javelin Strategy & Research Identity Fraud Study.
To keep fraudsters from doing too much damage, pay with a credit card rather than a debit card. "If you use a debit card and bad guys get a hold of your information, they can steal real money from a real account," Schulz says. "You'll almost certainly get that money back soon, but depending on when bills come due, that missing money can cause real problems, even if it's only missing temporarily."
If something doesn't seem right, don't swipe at the pump. Instead, go inside and pay. CompareCards found that almost half of Americans have changed the way they pay for gas because they're concerned about skimming. The most common change is paying inside more often.
Make sure to monitor your bank and credit card accounts, too. Early detection is key. Often, fraudsters will make small purchases of just a few dollars before attempting a larger transaction.
"If you can spot those initial fraudulent purchases, you can save yourself some headaches," Schulz says.
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