In the constant fight to protect personal privacy and security, few things put the average consumer on edge more than the thought of a credit card being stolen. Even if an individual isn’t liable for most of the spending a credit card thief might do, the hassle of cleaning up the mess and getting the accounts corrected can be time-consuming and frustrating. In an effort to prevent a problem before it starts, most consumers take care when shopping online, only giving out their credit card numbers at secure sites or through encrypted means. But with so much attention paid to high-tech identity theft, a much more subtle, low-tech form of credit card scheme is on the rise. With this method of card stealing, your credit card might be safely put away in your wallet, while a crook down the street is using that very card number at a face-to-face store to buy merchandise.

This crime is called card shaving, and here’s how it works: Crooks test a variety of 16-digit numbers until they find one that links to a legitimate credit card (they usually verify the number by telephone or online), or they simply buy a list of stolen credit card numbers off the black market. Then they make a new physical credit card with those numbers, usually by buying a general gift card, shaving the numbers off, and then attaching the numbers in the stolen account’s configuration onto an old or expired credit card. Then they score the magnetic strip on the back of the card so that, when they walk into a store, the store’s card reader can’t scan the card for a purchase. The clerk then enters the card’s number manually, which means that the clerk is entering the stolen number that was pasted onto the card. No PIN number or other security measure is required. The purchase is charged to the victim’s credit card account, and the crook gets away with new merchandise.

Seems a bit complicated and cumbersome in this era of wi-fi and e-commerce, doesn’t it? The reason for the increase in credit card shaving is partially because our high-tech security measures are increasingly effective. As criminals get progressively more desperate, the become more willing to try more time-consuming techniques to access stolen credit cards. Shaving also works partly because banks don’t always make it difficult; many credit card issuers use the same 12 numbers on every card, with just the final 4 numbers unique to an individual.

Another appeal is the lack of of a trail. Because credit card shaving is so low-tech, it’s very difficult to trace and penalize those who try it. The crook never needs to meet or see the victim, the victim’s online activities are totally unrelated to the theft (individuals can be victimized even if they never shop online), and by the time the victim discovers the unauthorized charges, the criminal has often moved on to another credit card number.

So what can we do to prevent this sort of identity theft? For starters, merchants need to be vigilant. Clerks in stores must be on the lookout for cards that seem tampered with (look for the glued-on numbers), even if it takes a few extra seconds (and even if they’re distracted and busy already). They should also check the back of the card for the correct signature and security code. Some experts go so far as to recommend that merchants don’t allow a purchase to be made if the card numbers must be entered manually. This sort of caution is important; the few criminals guilty of this sort of scheme who have been caught were discovered largely thanks to merchants who reported the fraudulent cards. And when you think about it, the merchant has a lot to lose if the charge goes through, since victims would dispute the charges with the credit card company and the merchant would end up dealing with the chargeback (too many of those means high fees and possible revocation of a merchant’s ability to accept credit cards).

Consumers, as well, must regularly check their credit card accounts to make sure there are no unauthorized charges. The longer a crime like this goes unnoticed, the greater the damage can be. Consumers should sign up with their credit card company to gain access to their account online, so that they can check their account activity as often as they like without having to wait for a monthly statement. Truly cautious consumers can have a new credit card number created for every transaction they do, and once the transaction is complete, the number is worthless. Citibank and PayPal offer these options, and QSecure will soon offer a card that generates a new number every time a purchase is made. 

Your card may be safe in your wallet, but that doesn’t mean a criminal isn’t out there creating a new one with the very same number on it. It’s easy enough to buy glue and razor blades. Merchants and consumers alike must work to prevent this sort of fraud before it becomes even more rampant. Let’s nip credit card shaving in the bud.

Sources for this article: CreditCards.com, Wisegeek.com, WalletPop