What Is Credit Card Cloning Fraud: How to Detect & Help Prevent It

Do you know where all your credit cards and debit cards are? The easiest way to confirm is to look in your wallet or purse and make sure none are missing, right? Unfortunately, this peace of mind  check may not be enough. Using card cloning fraud techniques, criminals can essentially pickpocket cards remotely—no physical contact required. According to the FBI, card cloning fraud costs both US consumers and financial institutions approximately $1 billion each year.¹

Key Takeaways

• Card cloning fraud happens when a criminal copies information from a legitimate cardholder’s card onto a different card.
• Criminals capture card data using skimming devices or information compromised by data breaches; skimming technology is often installed at POS terminals, ATMs, or gas station pumps.
• In the US, 62 million consumers have reported credit or debit card fraud, according to Security.org.²
• Preventing credit card cloning fraud requires a multi-layered approach, including real-time transaction monitoring, behavioral profiling, device and network intelligence, and machine learning.

What is Credit Card Cloning Fraud?

Credit card cloning fraud, also known as card skimming, is a type of fraud in which information on a customer’s credit or debit card is copied and transferred to a card controlled by the fraudsters. In other words, criminals can steal a customer’s credit card without physically removing it. 

Different payment card options, such as credit, debit, and gift cards, are all susceptible to card cloning. Criminals can then copy the card information to a different physical card and use it to make purchases in the cardholder’s name. They can also use the stolen information to breach personal accounts, initiate transfers, or access money orders. 

What makes this type of fraud so frightening is that it can happen without the cardholder even realizing they’ve been robbed. Card cloning fraud poses a significant threat to undermining trust in financial systems, making it crucial to maintain secure payments.

“Payment cards continue to be one of the most convenient ways for consumers to transact, whether it be credit, debit, in person, or online. However, fraudsters also find convenience in inflicting financial damage across these card channels.”  – Jas Anand, Lead GTM & Product SME, Feedzai

How Credit Card Cloning Fraud Works

Card cloning happens in four quick stages. Here’s a step-by-step breakdown.

• Skimming Card Data. Fraudsters conceal malicious card-reading devices, known as “skimmers,” at point-of-sale (POS) terminals, ATMs, or gas station pumps. These devices can read information stored in a card’s magnetic stripe. In some cases, fraudsters recruit accomplices who have access to merchant POS devices to place the skimmers for them. This may include store employees or gas station attendants who are willing to add the skimmer in exchange for a fee.
• Data Capture: Once the customer makes a purchase with their card, the device copies the card’s information. In some cases, criminals may bolster their crime by using hidden cameras to record customers entering their PINs.
• Card Cloning: Criminals (or their associates) retrieve the skimmers and copy the information onto duplicate cards. 
• Profit: Criminals can now use the cloned card to make purchases, withdraw cash, or sell the cloned card and its information on the dark web.

Here are the techniques criminals use to clone different payment card types.

Magnetic Stripes

The magnetic stripe on payment cards is the most common method for making payments with cards. It’s also highly vulnerable to card cloning fraud. Criminals can use the skimmers outlined earlier to copy sensitive information from card stripes and transfer this information to blank cards. 

EMV Cards

Card issuers began using EMV chips in payments to turn the tide against card-present fraud. This technology encrypts sensitive card information, making it harder for criminals to steal. While successful, criminals have found a workaround for this even technology. Using a practice known as “shimming,” criminals can insert a thin device into a card reader to steal information stored on an EMV chip. Shimming devices are smaller and often placed inside a reader, making them harder to see. As such, they may go unnoticed until it’s too late.

Contactless Payments

Contactless payments transmit encrypted transaction data using near-field communication (NFC) technology. But even this type of payment method is vulnerable to cloning. Criminals can use advanced tools to wirelessly skim information.

4 Examples of Credit Card Cloning Fraud

Criminals exploit payment systems at multiple locations, in both physical and digital venues. Here are some of the most common methods used to commit card cloning fraud.

• ATM Skimming: Criminals install skimmers and cameras at ATM kiosks to steal card data and PINs when customers make withdrawals.
• Gas Station Pump Skimming: Fraudsters install skimmers (or shimmers) at gas station pumps. Customers are normally too focused on their refueling to notice anything suspicious.
• Point of Sale Skimming: In-store POS stations, including those at restaurants and other merchants, can be fitted with skimmers and steal card information.
• Phishing & Fake Websites: While the other options involve card-present transactions, some criminals use fake websites that resemble legitimate businesses, such as Amazon, eBay, or a customer’s bank. Using phishing tactics, they can deceive customers into sharing their personal information, which can be used to clone their credit or debit cards.

Card Cloning Fraud Trends & Statistics

• $1B: Amount US financial institutions and consumers lose to card cloning (skimming) fraud each year (FBI).¹
• 62M: Number of US consumers who have experienced fraudulent charges on their credit or debit cards (Security.org).²
• 24%: Increased rate of credit card fraud in the first quarter of 2025, compared to the previous quarter (FTC).³
• $4.01B: Projected value of the payment card skimming market in 2025 (The Business Research Company).⁴
• 365,758: Reported cases of identity theft in the first quarter of 2025 (FTC).³

 

How to Detect and Prevent Card Cloning Fraud

There is no single solution to preventing credit card cloning. However, banks and businesses can take several vital steps to help them understand how their customers typically shop, maintain secure payment systems, and prepare customers to be vigilant.

Use Data to Your Customers On All Payment Channels

Stopping credit card cloning card fraud requires banks to know their customers across all payment options. This includes everything from how they typically make in-person purchases (e.g., using magnetic stripes, EMV chips, or contactless payments), how often they use their cards, and how they usually pay online (e.g., via laptop, mobile device, or in-app).

Build hyper-granular profiles of your customers’ normal purchase behaviors and use this data to identify anomalies in real time (e.g., using magnetic stripe instead of an EMV chip) or a large number of low-value transactions. Use advanced analytics to invest and transform data from multiple data streams across different channels. By continuously learning from user behaviors and enhancing these insights, you can protect your customers from sophisticated attacks, such as account takeover (ATO) fraud, which often precedes card cloning fraud.

Enhance Rules-Based Systems with Machine Learning

AI and machine learning can support traditional rules-based systems in detecting card cloning activity. For example, rules can be set to decline transactions if they exceed a certain amount threshold or detect an unusual distance between the buyer’s current location and the previous location of their last purchase. Merchants can also be alerted if a mismatch is detected between the card and the merchant countries. 

This approach can also detect BIN attacks, which are often part of a larger cloning scheme. Machine learning models can look for unusual volumes of transactions, low-value attempts, or an unusually high number of cards with the same BIN being processed quickly.

Implement EMV Chips

EMV chips have significantly enhanced card security compared to older magnetic stripe cards by utilizing encrypted payment information. But while EMV chips enhance security, fraudsters continuously adapt. Magnetic stripes can still be used to steal information, and many consumers still use them at checkout out of familiarity. 

The fact that criminals are now using “shimming” technology suggests that even this technology is vulnerable to card cloning fraud. EMV chips are not a silver bullet, but they are still a vital solution in the fight against fraud.

Review Physical Infrastructure

Advise your business customers to regularly check the security of all physical points where card transactions occur. This includes ATMs, POS terminals, or gas station pumps where skimmers or shimmers may be placed. Businesses should ensure that POS terminals are EMV compliant to make it harder for criminals to use malicious devices to skim magnetic stripes. 

Educate Consumers

Consumers are the first line of defense in the fight against fraud. Banks and businesses must empower them with the knowledge they need to understand how card cloning works, including the steps involved, and provide an actionable roadmap to keep themselves safe. Advise customers to inspect POS terminals and card readers for unusual alterations before inserting their card and to use more secure (but not foolproof) payment methods, such as EMV chips and contactless payments. If they find a suspicious transaction, instruct them to contact their bank or the business where the transaction occurred.

How Feedzai Helps Financial Institutions Fight Credit Card Cloning Fraud

Cloned cards take a significant financial burden on both financial institutions and their customers. The damage can begin the moment a criminal makes a purchase with a cloned card. Feedzai provides banks and financial institutions with the tools they need to detect and prevent card cloning fraud in real time, employing a multi-layered approach. 

• Real-Time Transaction Monitoring: Feedzai’s platform uses AI to analyze every card transaction (including card-present and card-not-present (CNP) transactions) in real time. Using this rapid analysis, banks can spot suspicious patterns and block fraudulent activity before losses occur.
• Behavioral Profiling: The system builds detailed profiles of each customer’s typical behavior, including transaction locations, purchase frequency, and device usage. If a customer starts to behave unusually by engaging in strange spending patterns, banks can be alerted for potential cloned car activity.
• Machine Learning and Data Analytics: Models trained on years of historical and real-time data, enable the detection of new and emerging card cloning tactics without relying solely on manual rule updates.
• Device and Network Intelligence: Feedzai adds an extra layer of defense against cloned card fraud by using device fingerprinting and network analysis to identify when a transaction is happening on a suspicious device or network.
• Seamless Integration and Scalability:  Banks to quickly enhance their fraud defenses without disrupting customer experience using production-ready APIs.
• Low False Positives, High Accuracy: Ensure legitimate transactions are not unnecessarily blocked, maintaining customer trust while stopping fraudsters in their tracks.

The days of physical pickpockets may be dwindling. But that doesn’t make card theft and card cloning fraud any less severe. By building profiles of customer behaviors, drawing actionable insights from data in real time, and securing physical infrastructure, banks and merchants can feel more secure that the payment cards they accept are legitimate and not cloned copies.

Resources

• Blog: Fraud and Financial Crime Trends 2024: What Came True and What Did Not
• Blog: What Is Fraud Analytics and How to Use Data for Fraud Detection?
• Commentary: Feedzai’s Acquisition of Demyst Is a Modern Response to Today’s Fraud
• Solution: Stop Transaction Fraud and Protect Honest Customers