TransUnion Launches Credit Card Skimming Detection Service

Skimming fraud takes many forms, but most often involves a cardholder turning over physical possession of his or her card to a retail or restaurant employee, who then swipes the card through a small, illegal reader called a "skimmer." The skimmer copies the data encoded on the card's magnetic stripe, and then the criminal creates counterfeit cards to rack up illegal charges at consumers', and ultimately credit card issuers', expense.

TransUnion's advanced solution creates a pooled database of historical data about all known skimmed cards from multiple credit card portfolios. The aggregated data is then analyzed to identify like places where skimming is repeatedly occurring. When a "common merchant" is found based on industry-determined thresholds and timeframes, TransUnion transmits a daily report to credit card issuers that advises them of the findings via a secure URL. The information is then used to initiate an investigation to determine if the merchant is in fact a victim of credit card skimming.

"CPP is a great example of how TransUnion's innovation and industry collaboration is resulting in advanced solutions to combat fraud," said Tim Keller, director of fraud and identity management solutions for TransUnion. "This first-of-its-kind solution automates what was previously a fragmented and manual process to allow issuers to more rapidly and effectively identify points of compromise based on pooled data. And, because CPP is based on industry trends, the rules are easily adapted to counter the change in fraudulent behavior."

First launched in Canada five years ago, CPP is now available throughout North America. The tool has helped Canadian credit card issuers and law enforcement reduce the number of skimming crimes. "We have brought together ten of the largest issuers in Canada to tackle a serious industry issue, leading to a significant reduction in fraud losses," said Gloria Baran, director of fraud solutions for TransUnion Canada.