Guard your business against reloaded credit cards

by Neil Moncrief on June 2, 2009

With the abundance of stolen credit card data, it had to happen sooner or later… The thugs who purchase these numbers grew tired of only being able to use them online. They perfected a trick that allows them to use stolen CC numbers in respectable brick-and-mortar retail businesses. They only needed a source for stolen plastic credit cards and a magnetic strip writer. Now, they “reprogram” stolen cards by loading stolen CC data onto the magnetic strips on back, and Voila!, authentic-looking credit cards with no monthly payments required!

Now, many credit card processors program terminals to identify these cards before the bad guys can leave with your stuff. It’s simply a matter of comparing the account numbers on the front of the card to the information read from the magnetic strip on back. For every transaction, your terminal should prompt you to enter the last 4 digits from the face of the credit card. The terminal then compares that to the numbers it scanned from the back. If there’s no match, there’s trouble!

Like most security features, this requires merchants to spend a few seconds keying in information. When this feature first appeared, some of my merchants resisted because they “knew most of their customers” or because their businesses “don’t attract that kind of customer.” Several times, at the merchant’s request, I even disabled that feature. But since then, I’ve suggested that all merchants leave the extra layer of protection in place. In short, you don’t have to own a pool hall or a tattoo parlor to be subject to stolen cards. And if you can protect yourself by entering four numbers, I say “Just do it!”

If your CC processor uses this feature to help protect your business, you can breathe a little easier. Make sure your employees understand why it’s important. But if your processor doesn’t think this protection is necessary for your business, or if your terminal doesn’t offer this feature, please call me. I’ll be happy to examine your current practices and make suggestions how you can better safeguard your business.

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