Identity theft is only the start of a chain of events that ultimately cost victims money. It is not the theft of identity alone that concerns people; rather, it is the financial losses that identity theft enables.

Criminals use victims’ personal information to engage in fraudulent financial transactions that generate cash.

While social engineering, theft of mail, and other nontechnical approaches may sometimes be used to intercept personal data, of bigger concern is the use of technology to copy data from credit and debit cards when they are used in legitimate financial transactions. These data can then be used to create duplicate credit and debit cards, which are then used to drain bank accounts or rack up huge credit card balances.

The criminals who create these “skimming” devices have a high level of technical knowledge. Furthermore, they must install these devices in point-of-sale (POS) terminals or automated teller machines (ATMs) to gain access to victim card data and personal identification numbers (PINs).