It is believed that the factory relied heavily on skimmed credit card data from Canada. One of the easiest methods is for the acceptor to verify that the signature on the credit card receipt matches the signature on the back of the credit card, something that far too few store cashiers take the time to do. Another step that acceptors can take is to verify that the account number embossed on the front of the card matches the account number stored on the magnetic strip on the back. If the two aren't in synch, that's a pretty good clue that there is something fishy going on. There the account number is checked against a database of known bad cards and if someone has reported a card lost or stolen, there's a chance that the crime spree will be cut short right then and there.
Acquirers also run something called a velocity file check.
With credit card forgery on the rise, credit card issuers are looking at a host of new methods aimed at making it more difficult to skim account numbers and forge cards, including the addition of encrypted information on magnetic tape space that is currently set aside for discretionary information. There is also talk of moving to a system of Personal Identification Numbers for credit cards, much like those use for ATM cards. But that, as they say, is a whole 'nother story, and since I've already failed miserably in my attempts to make this week's installment of the Answer Geek a short one, we'll have to save this particular form of credit card crime for another day. Todd Campbell is a writer and Internet consultant living in Seattle. The Answer Geek appears weekly, usually on Thursdays.