What does skimming refer to in the context of identity theft?

Skimming in the context of identity theft specifically refers to the use of devices that capture magnetic strip data from credit cards. This process typically involves a small, discreet card reader that can be installed on ATMs or point-of-sale terminals. When an unsuspecting cardholder swipes their credit card, the skimmer collects sensitive information, such as the card number and expiration date, without the cardholder's awareness.

This method is particularly concerning because it allows identity thieves to create cloned cards or engage in fraudulent transactions without needing to know personal identification numbers (PINs). Understanding skimming is critical for individuals and financial institutions to protect against identity theft, as it highlights the vulnerabilities inherent in card transactions.