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Secret credit card thieves target restaurants

Published: Saturday, July 4 2015 11:18 a.m. MDT

RAIL introduces a novel way for restaurant patrons to pay for a meal using a proprietary mobile device designed expressly to frustrate data thieves. (Paul Sakuma, AP) RAIL introduces a novel way for restaurant patrons to pay for a meal using a proprietary mobile device designed expressly to frustrate data thieves. (Paul Sakuma, AP)

It just happened at a restaurant in Indianapolis, according to NBC 13 in Indianapolis. Several patrons of Ike and Jonesy's restaurant say their cards were compromised. A regular customer, Anika Crowe, told NBC 13 WTHR that her card was hit for more than $900.

"Over the last week, she and fellow workers got warnings from their banks about suspicious transactions on their credit and debit cards," NBC 13 reported. Crowe's card information was used to make purchases in Arkansas, in Ohio and overseas. She and the other victims all received warnings about their cards within a week of eating at the restaurant.

So far, the connection in this case isn't clear, but the ways a card can be compromised vary.

An employee or other person can see the card's numbers and write them down. Devices called skimmers can be hidden in card swipers to hijack the numbers. Some cards can even be read by other devices when a person walks by.

Restaurant Finance Monitor, an industry website, says "92 percent of all data breaches are external, and the number of breaches grows annually, a … big problem for restaurants — 65 percent of all data breaches take place in the hospitality and retail industries."

This means that 92 percent of the theft comes from people who do not work at the restaurants.

When card numbers are stolen, Restaurant Finance Monitor says, most often they are sold on the back market.

EHow.com says the easiest way to avoid this sort of fraud is to use cash. Keeping track of charges and monitoring accounts helps in spotting fraud as well.

USA Today reported about how one company is using technology to stop data thieves.

"The system, called RAIL, introduces a novel way for restaurant patrons to pay for a meal using a proprietary mobile device designed expressly to frustrate data thieves," USA Today says. "RAIL instantaneously encrypts data from each restaurant sale in real time."

The mobile device, created by Viableware in Seattle, looks like a cross between an iPad and a restaurant check wallet. Patrons can self-swipe their cards and sign with a stylus on the touch screen. There is even an option to pass the RAIL device around the table so people can pay individually for their parts of the meal.

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