“A lot of times, there’s an organized crime ring behind it all,” Carter says. When a diner hands the server her credit card, the server will swipe it through the restaurant’s own point-of-sale system and then through a skimmer, which records the credit card number. “Usually it’s the waitstaff - they get your credit card, and they have skimmers that are so small they can be held in the palm of your hand.” “It’s starting to become more prevalent at restaurants,” Carter says. While skimmers are most often used at ATMs and gas stations, they’ve been used at restaurants before (like in the New York case mentioned above). “When a credit card is swiped, the skimmer captures the magnetic field, and then collects it, saving the data of everyone who swipes.” Skimmer: “A skimmer is a small device that attaches to a reader,” says Yinzhi Cao, an assistant professor of computer science and engineering at Lehigh University. There are a couple of ways credit card fraud can occur at a restaurant: “Basically, it’s when a someone steals another person’s credit card information intentionally to use for fraudulent purposes,” says Misty Carter, research specialist for the Association of Certified Fraud Examiners. What is credit card fraud, and how does it happen at restaurants? Below, more about credit fraud: Jow it works in a restaurant, and how some are trying to make it harder to perpetrate. Though in some instances it’s the work of rogue employees targeting specific diners, sometimes the perpetrators are hackers stealing massive quantities of customer data at one time in recent months, large-scale credit card data hacks have been reported at chains including Wendy’s, Arby’s, Sonic, Whole Foods, and Chipotle. Fraud is especially easy to perpetrate at restaurants, as diners hand over their credit cards without a second guess (and don’t often see where their card goes once it’s handed over). While the above example is not typical, credit card fraud happens all too often. As hefty credit card bills weren’t unusual for the diners, many weren’t even initially aware that their information had been stolen. Twenty-eight people were ultimately indicted in the scheme, which involved waiters using lipstick-sized electronic skimmers to extract data from the magnetic strips of credit cards. As they handed over their credit cards, at least 50 diners unknowingly handed over their identities, which were stolen by a group of servers in a scheme to buy and resell luxury items.Īs the New York Times reported back in 2011, diners signing the check for a steak dinner also wound up picking up the tab for “cases of vintage French wine, Louis Vuitton handbags, Cartier jewelry and even a Roy Lichtenstein lithograph of Marilyn Monroe.” What transpired next, and over the next eight months between April and November 2011, would shock even a New York attorney general. When the checks came, they plunked down company cards, personal Visas, and the occasional American Express Black card. They ordered bottles of wine, filet mignon, and the occasional porterhouse. On a typical April evening in Manhattan a few years ago, well-heeled customers were dining at a slew of high-end steakhouses including Morton’s, the Capital Grille, Smith & Wollensky, and the Bicycle Club.