Know risks of paying at the pump

by Center for Personal Finance editors

McLEAN, Va. (8/13/08)--The next time you fill up, think twice about using the "pay at the pump" option. Police have uncovered a skimming device on some gas station pumps, installed by thieves so they can steal your credit and debit card data (USA TODAY Aug. 5).

This hard-to-detect electronic device has been discovered at gas stations in five states--California, Delaware, Nevada, Pennsylvania, and Washington--with $1 million to $3.5 million stolen from unsuspecting customers.

Several crooks have bypassed the skimming device and intercepted data by hacking into a wireless connection used by the station. Some stations wirelessly transmit credit card data from the pump to their central computers. All a thief has to do is wait nearby, hack in, and download the data to a laptop (creditcards.com Mar. 17).

Although skimming devices have been used at ATMs, they just recently have been discovered on the inside or outside of gas station pumps. Police are asking gas station owners and attendants to put seals on the pumps and check them daily, but no real precautionary measures have yet been put in place.

To protect your card data at the pump and elsewhere, take protective measures:

• Pay inside. If you're using debit or credit at gas stations, consider paying inside and signing all receipts. Or, for added peace of mind, use cash. Some stations offer discounts for patrons who use paper money rather than plastic.

• Monitor your accounts. Check financial statements online or as soon as they arrive, and report any problems. Also, order a credit report once a year from each of the three credit-reporting agencies--Equifax, Experian, and TransUnion. Visit annualcreditreport.com.

• Safeguard your numbers. Memorize your personal identification number (PIN), don't carry your Social Security card with you, and don't write either of those numbers on any of your cards or in your address book.

• Choose credit option. When using your debit card, the cashier may ask, "Credit or debit?" Typically, credit transactions that require a signature offer better protection against fraud than those conducted using a PIN number. Also, choosing "debit" often is treated as an ATM transaction, which could subtract from any free monthly "allowance" of debit transactions to which you may be entitled. Take this into account with all purchases, not just gas.

• Get help. If you suspect fraudulent activity, tell the station attendant and contact local law enforcement immediately.

For more information, listen to "When to Use Debit vs. Credit Cards" in Home & Family Resource Center.

Printed Friday, January 9, 2009

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