Inside The Mind of a Credit Card Thief pinned down an identity thief who was convicted of credit card fraud and identity theft in 2004. “He faced eight years in prison, but under a plea deal he agreed to community service and to pay back more than $200,000 in restitution. He also worked for the U.S. Secret Service, helping to infiltrate the online underground and training agents in the latest fraud techniques. His help led to the arrests of five to 15 people over two years.”

He’d buy stolen credit card data online and use it to create fake credit cards. After making fake IDs to match, he’d go into stores and buy expensive items like laptops, which he then sold on eBay.

Many people don’t realize that after credit card information has been skimmed or compromised in a data breach, it is often sold to identity thieves for pennies per card.

Hackers can copy the stolen data onto black cards, hotel keys, or “white” cards. White cards are effective at self-checkouts, or when the thief knows the clerk and is able to “sweetheart” the transaction. A white card can also be pressed with foils to look like a legitimate credit card.

Debit card fraud can happen a number of ways, including hacking, ATM skimming, gas pump skimming, or point of sale skimming. The key, of course, is that the bad guy gets your PIN. In the end, the bank doesn’t want to believe that you were defrauded. It’s cheaper for them to conclude that you are lying.

When asked, “What about debit cards?” the thief replied, “I always recommend against them. With debit cards, it’s your real money in your bank account you’re playing with. So if someone gets your debit card information and uses it, your cash is gone until you fill out a lot of paperwork and persuade the bank to give it back to you. Credit cards are much better at protecting you against fraud. And if you’re worried about debt, you can always pay them off every month.”

Protect yourself by covering up your PIN at ATMs, gas pumps, and point of sale terminals. And while it may seem inconvenient, if you use credit or debit cards regularly, you should check your online statements daily. Consider limiting your debit card use. I use mine for deposits and withdrawals, but only two or three times a month.

McAfee Identity Protection includes proactive identity surveillance to monitor subscribers’ credit and personal information, as well as access to live fraud resolution agents. For tips on how to protect yourself, visit

Robert Siciliano is a McAfee consultant and identity theft expert. See him discuss credit and debit card fraud on CNBC. (Disclosures)

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