Should You Be Worried About Credit Card Fraud in Restaurants?

On an April evening back in 2011, several customers who were dining out at high-end steakhouses in Manhattan became victims of identity theft. In restaurants like Capital Grille, The Bicycle Club and Morton’s, they enjoyed filet mignon, porterhouse and bottles of wine.

The unsuspecting diners dropped their credit cards when the checks arrived, and what happened over the next eight months was their worst nightmare. An upwards of 50 restaurant customers had virtually handed over their identities to a group of servers who were scheming to buy and resell expensive goods.

In the end, 28 schemers were charged with identity theft. They used lipstick-sized skimmers to pull the data off of credit cards and bought luxury items like vintage French wine and Luis Vuitton handbags.

How you can be a victim of theft at restaurants

Credit card theft most frequently happens at restaurants with the use of a skimmer, as was the case in the 2011 Manhattan scheme. A skimmer is a small, inconspicuous device attached to a legitimate card swiper that captures magnetic data.

In many cases, the waitstaff who run your credit card through a skimmer are part of a larger organized crime ring.

Hacking is another prominent method of stealing identities. More often in the news we are hearing of companies like Sony and Amazon having their customers’ information stolen from databases.

Restaurants usually keep an electronic log of customer payment information. In 2015, databases at restaurants like McCormick and Schmick’s were hacked into by criminals.

Are chip cards more secure than swiped cards?

Technically, chip readers are more secure than magnetic strips on credit cards. However, it is possible for criminals to extract data off of your card without even physically touching it. There are devices out there used by criminals who send signals to collect credit card information from anyone in their vicinity.

How to protect yourself from identity theft at restaurants and bars

Firstly, you can use prepaid cards or cash. Understandably, this may not be the most practical solution. Your best bet is to keep a close watch on your credit card statements. Victims of identity theft often don’t realize what’s happening to them until significant damage is done. If you keep on top of your finances, you can shut down credit card fraud before it gets out of hand.