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Michigan finds electronic thieves at the gas pump

Jim Lynch
The Detroit News
State of Michigan Weights and Measures Inspector Justin Houghton, 30, inspects this card reader and finds no tampering at MSU Petroleum at 127 and Jolly Rd. XXXXMichigan's Department of Agriculture, charged with monitoring operations at gas stations, has come across an alarming new problem that could be costing Michigan driver's more than they realize. Department inspectors have repeatedly come across skimming machines. These little electronic devices get placed in the credit card reader, at the pump, and stores consumers’ information. The people behind these crimes show up, buy gas, and break into the machines with a key while they're filling up. After some time they return, crack open the pump again, and remove the machine along with the stored credit card numbers and other consumer information. Then they go out and use those numbers to purchase gift cards or other things that are hard to trace. Since coming across this scam, Agriculture has started inspecting more than 100,000 gas pumps in the state with its staff of 14 people. So far, after inspecting 6,000 pumps, they've found 15 skimmers. The Detroit News photographs State of Michigan Weights and Measures Inspector Justin Houghton, 30, as he opens up gas pump cabinets and inspects the card reader systems at gas stations in the Lansing area, Wednesday, October 7, 2015. According to department officials, employees from the State of Michigan Department of Agriculture did a sweep of several gas pump card readers, last Saturday, in the Grand Rapids area and discovered one skimmer. (Todd McInturf , The Detroit News)2015.

Remember when $4-a-gallon fuel was the biggest worry drivers had at the gas pump? State officials are tackling a new problem that might put a bigger dent in their wallets: Skimming.

Investigators have begun to find electronic machines inside gas pumps around Michigan that allow criminals to gather and store credit card information from unsuspecting drivers.

The skimming machine criminals typically use the credit card data to buy gift cards, which means their spending can’t be traced.

Michigan Department of Agriculture and Rural Development inspectors began searching in earnest for the electronic thieves in August and have found 15 skimming devices in 6,000 pumps they’ve looked at.

It works out to a rate of only 0.25 percent, or less than a percentage point of the state’s filling machines. But when projected to the more than 100,000 gas pumps across the state, it means there could be as many as 250 machines out there surreptitiously collecting credit card information.

“Our main focus in performing inspections has always been to make sure people are getting the right quantity of gasoline ...,” said Craig VanBuren, director of the Agriculture Department’s Motor Fuels Quality and Weights and Measure programs. “But (skimmers) have become a part of our everyday inspections.

“We’ve already found skimmers on pumps we’d previously checked two weeks earlier.”

This pressure sensitive security seal has been tampered with, or gas station employees have not replaced it with a new one after the card reader was inspected by a State of Michigan Weights and Measures inspector.

Even credit card holders with the new chip-security technology remain vulnerable to skimming devices because gas stations aren’t required to replace their credit card readers to accommodate the chip-enabled cards until 2017.

“People still need to be cautious for a couple more years,” said Jennifer Holton, spokeswoman for the Agriculture Department.

State inspectors have found at least one skimmer in Belmont, Perry, Grand Ledge, Owosso, Byron Center, Flint, Alto, Grand Rapids, Benton Harbor and Albion. The closest skimmer to Metro Detroit was found in Chelsea outside Ann Arbor.

The use of electronic thievery happens right out in the open. An August arrest in Grand Ledge, west of Lansing, illustrated how two suspects operated before their arrest, police said.

On Aug. 24, a Grand Ledge officer staked out a gas pump at a Saginaw Highway Shell station where a skimmer had been discovered. The hope was those who placed the electronic device would come back to collect it.

“I observed the ... white Acura pull up to pump number 10,” one of the arresting officers wrote. “I observed (the two suspects) walk over to the pump. They opened the door on the front of the pump.”

When the suspects started to drive away, a second officer stopped their vehicle, while the first inspected the pump.

“I went to pump 10 and checked the (security) sticker on the front...,” he wrote. “I observed that the sticker had been tampered with.”

The officer discovered a set of keys on one of the suspects, Yunier Carballo Pupo, 33, of Austin, Texas. One of the keys bore a striking resemblance to the pump key produced by the owner, and it opened the access panel, authorities said. Inside they found a skimming machine.

State officials also said they discovered a laptop computer in the back of the car, driven by Raul Gonzalez Falcon, also of Austin.

Both Falcon and Pupo face charges of unauthorized capture or transmission of personal identifying information, as well as use of a computer to commit a crime.

With the case pending, Eaton County Prosecuting Attorney Douglas Lloyd declined to offer much detail but said each suspect could “potentially serve up to 12 years in prison.”

“Bottom line, this is fraud,” said Jamie Clover Adams, director of the state Agriculture Department. “This is stealing someone’s personal information for criminal use. These inspections are just another way MDARD is protecting Michigan consumers at the pump.”

This credit card skimmer device is installed in a gas pump. Inspectors have found 15 in 6,000 pumps.

It’s a new problem for the Agriculture Department’s 14 inspectors who cover the state.

The odds would seem to favor the skimmers, especially since the keys they use to access pump panels are fairly generic. This makes most gas stations potential targets.

“A lot of these pumps have keys that are the same common key,” VanBuren said. “So when a criminal gets a hold of one, they have access to thousands of pumps.”

To help combat the problem, the Department of Agriculture has produced a video offering tips for gas station customers to protect themselves: https://www.youtube.com/watch?v=50i67kufCTs&-feature=youtu.be.

Among the precautions motorists can take:

■If something at the pump does not look right, such as a security sticker that’s been tampered with, alert the store clerk and pay for the gas inside.

■Try to use pumps closer to the store that are within sight of the clerk.

■Regularly check bank accounts to spot unauthorized charges.

JLynch@detroitnews.com

(313) 222-2034