You probably heard about the Bulgarians that copied ATM and Credit Cards in Bahrain some time ago. You may also have heard about some people who said they had all of their money vanish from their accounts, and saw some transactions on their bank statements that they did not make. Or all sorts of "fraud"... What are they talking about? What's happening?
The current cards use a magnetic strip to store your account number, name and other data. It does not store the PIN. This data is very easily read and then copied. This is called "skimming". The card data is copied by attaching some device to an ATM, or at Point of Sale devices. When the card is skimmed, many copies can be made and used not just in Bahrain, but around the world. Don't ask me how, but it is dead easy, and will cost no more than BD10.
Skimming cards at ATMs in Bahrain was, and still is, a very serious threat, and banks recently used some quick and dirty solutions on their ATMs to prevent skimming devices from being attached to their ATMs. You probably noticed some weird device on most ATMs in Bahrain attached to the ATM just where you enter your card. But that is not the solution. Cards can be skimmed outside Bahrain. And skimmed cards can be used inside Bahrain.
Q. So what is the solution?
A. New Chip, Smart Cards, or EMV cards, which are now becoming normal in Europe are impossible to copy. These cards store more data in a very secure way. The cards also provide for other services.
Q. So why are banks in Bahrain or the GCC not using these Smart Cards yet?
A. Cost. It costs more to the bank to implement a solution that uses Smart Cards. And of course banks would rather bury their heads in the sand and deny any problems or fraud rather than invest in this costly technology.
But now that fraud is becoming a real major issue that starts to bite from banks profits, and because of pressure from international organizations, banks are rushing to use and issue EMV cards. It will take time before we see them in wide use in Bahrain.
Q. Until I get to use one of these Smart Cards, how can I protect myself from fraud or my card being skimmed?
A. Use your card in trusted merchants and report any suspicious activity or device you see at a Point of Sale or any weird device attached to an ATM to the concerned Bank.
Try not to have all your eggs in one basket. If you can, do not put all your money in one account and link it to the card. If that card is skimmed, all the money in the account can be stolen via your skimmed card before you even notice.
Check your account regularly and report any transactions you did not make. The bank "should" refund you and create you a new card. But don't assume they will do it easily.
If you suspect your card is skimmed, report it as Stolen immediately.
Try to hide your PIN when you enter it at an ATM or POS machine. Your card may not be usable without a PIN. When the cards are skimmed, there is either a small camera or somebody that tries to see the PIN you entered. Make it difficult for them to see your PIN.
Happy and Safe Banking!