Security News U.S. Secret Service Warns of Chip Card Scheme

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Content source

https://krebsonsecurity.com/2018/04/secret-service-warns-of-chip-card-scheme/

The U.S. Secret Service is warning financial institutions about a new scam involving the temporary theft of chip-based debit cards issued to large corporations. In this scheme, the fraudsters intercept new debit cards in the mail and replace the chips on the cards with chips from old cards. When the unsuspecting business receives and activates the modified card, thieves can start draining funds from the account.

According to an alert sent to banks late last month, the entire scheme goes as follows:

1. Criminals intercept mail sent from a financial institution to large corporations that contain payment cards, targeting debit payment cards with access to large amount of funds.
2. The crooks remove the chip from the debit payment card using a heat source that warms the glue.
3. Criminals replace the chip with an old or invalid chip and repackage the payment card for delivery.
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