Altered credit cards are credit cards that have been illegally changed to reflect new cardholder information, numbers and expiration dates. This scheme has been around since credit cards were first produced. Some altered cards are very easy to detect, but most look and feel like the real thing. These cards lead to an annual loss of over $1 billion due to willing to unwilling merchants running these cards.
First Instances of Altered Cards
The first cards were very crude and easily detectable. Fraudsters would simply cut a piece of plastic to be the same size and shape of a regular credit card and then emboss it with real numbers and cardholder information. Due to the crudeness of these cards, the credit card processing had to be initiated by merchants who were willing to illegally use these cards. This was done before POS systems with magnetic strip readers were invented.
The merchant account holder would split the card’s value with the fraudster, making this a profitable scheme for both parties involved. Many law enforcement agents labeled this a blue plastic or white plastic crime because that was the common color of plastic used to make the fake cards.
Present Instances of Altered Cards
The present incarnation of this scheme is much harder to detect. Altered cards now look like real credit cards, complete with logos, names, images and graphics. In fact, many of the best altered cards look and feel exactly like real credit cards. That’s because they often start out as real cards that fraudsters have changed.
Most of the time real magnetic strips will be added to fake cards and the numbers will be embossed to reflect the strip’s information. The encoding will also be changed so that these cards are easy to use. Many credit card processing programs attempt to detect these cards by forcing merchants to enter the last four digits of the card or by encrypting the information and ensuring that the key matches the real card, but even these measures aren’t always effective.
Detecting False Cards
There are several ways that merchant account holders can detect false cards. Check the symmetry of the numbers. Many fraudsters use aftermarket embossers that can only emboss one number at a time, which can lead to problems with symmetry. You should then check the magnetic strip. Many fraudsters are lazy and destroy the strip so that you have to manually input the numbers, which bypasses most security measures.
Look for holograms on the card, which are rare with altered cards. The last thing you can do is check the receipt to ensure that the card number and name match the card you ran.