Credit Shaving: Should You Be Worried?

Identity theft is the fastest growing crime in America. Because of that, most people picture identity thieves as technologically savvy internet hackers. But a surprising number of identity thieves only employ the use of the internet to lead them to detailed “how to” instructions. Some novice identity thieves (and perhaps some lazy experts too) have come to rely on a payday that comes from stealing identities and credit card numbers the old fashioned way: guessing.

That’s right. Some identity thieves are just a lucky guess away from hacking into your bank accounts. The problem with relying on the guessing method of stealing bank or credit card account information is that it significantly limits the way in which a thief can use it. Without a name or address of the rightful owner of the card, or the three-digit security code on the back, online purchases are out. So thieves must get creative if they want to tap into the newly found resources they have stumbled upon.

Their solution of choice, at the moment, is commonly referred to as credit card shaving.

How it Works

Thieves begin by purchasing stolen credit card or debit card numbers on the internet. Or by randomly guessing and testing numbers online until they find one that is live. Then, they head to the local grocery store to purchase Visa or MasterCard gift cards. Since the first twelve numbers on a credit card are generally just the routing and identification numbers for the bank, thieves try to find a gift card with the first twelve digits that match the live number they’ve discovered.

Then they purchase the card and use a razorblade to shave the last four digits off of it. After that, they quickly iron the card to get rid of any rough edges. The heat melts the plastic back into place. They also shave numbers off of other gift cards and find the four digits they need to complete the account number and they superglue them on the gift card in the desired order in the blank space created by the recently shaved off numbers.

Because these bank-issued gift cards don’t have an account holder name or expiration date, they can be fairly easy to use. Identity thieves also make sure to damage the magnetic strip on the back of the card to make it look worn out so that clerks cannot simply swipe the card through machines to make purchases. Instead, they have to “force a sale” by manually typing the credit card number into their machines in order to complete the transaction. This allows thieves to steal from people whose names they don’t even know. Victims are nothing more than a random four digits cut and pasted onto a makeshift card in the eyes of identity thieves.

Some identity thieves have been known to steal the wallets and purses of people in order to steal their personal information and eventually their identities. In certain cases, thieves have been known to hang onto stolen cards long after they have been deactivated by their rightful owners. They do this so they can use these cards for credit shaving purposes—they either harvest these cards for their numbers, or they cut and paste new numbers onto them.

Why It Works

This crime might raise suspicion in stores where clerks and cashiers actually take the time to look closely at a card. In some cases, thieves offer excuses like “I accidentally washed and dried the card in my jeans” when they get crooked glances from attentive sales people. But in low end stores with high traffic, cards like this could easily be passed off because the clerk doesn’t have time to thoroughly examine each card as he or she runs it through. In other cases, clerks might notice that a card looks suspicious but they also know that he or she cannot be held liable for what happens as a result of authorizing the transaction. So he or she goes ahead and punches in the card numbers and completes the sale anyway.

Identity thieves can use the same card until the rightful owner realizes his or her card number has been compromised and closes the account, or until the account is out of money. Since thieves like this are constantly working on finding new account numbers and making new cards, they don’t usually wait until an account is closed for fear that the number would be reported stolen and they could be arrested on the spot. Instead, they hit a card a few times over the course of one or two days and then move on.

How to Protect Yourself

Because this crime relies on picking or purchasing card numbers at random, there is no way to protect yourself from having it happen to you. However, there are several things you can do to minimize the damage should you be targeted.

1. Enroll in online banking. If you enroll in online banking you have the ability to check charges made to your account anytime. You don’t have to wait until your billing cycle is up at the end of each month. Regularly log on and check your bank account or credit card statements a few times each week just to make sure there aren’t any suspicious or unauthorized transactions appearing on your account. If there are, report them right away.

2. Keep detailed records of your accounts. Make sure you use a ledger both for your check book and your credit cards. Keep detailed records of all of the purchases you make on each account every month, as this will make it easier to spot fraudulent activity. If you share your account with a partner, ask him or her about transactions you know you didn’t initiate. If he or she doesn’t know anything about it either, you can assume you have been a victim of identity theft and report it accordingly.

3. Guard your account number. There’s really nothing you can do about an identity thief who randomly guesses your card number. But you can take extra precautions to help ensure that you aren’t doing anything that would make it easier for a thief to guess your account number.

Identity theft is a serious crime. The Federal Trade Commission estimates that there are between 9 and 10 million new victims of this crime each year. Don’t let fear consume you. Instead, do your part to protect yourself. You only get one identity. Make sure no one else is out there using the same one.