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Originally Posted by Chris T
<snip>Apparently what's likely to have happened is when Mrs T paid for something in a shop, some unscrupulous shop assistant took a second swipe of the card. How they managed to then use that without actually having the card in their hands is beyond me. </snip>
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The usual method is that the fraudulant swipe is used to record the data by means of a handheld card reader, and then this copied data is physically written to another card which is usually a stolen credit card that has been maxxed-out and itself then been cancelled. This means that the thief can re-use the stolen credit card until it's cancelled as the magnetic strip now contains details of an active account. Once the fraudulent activities are identified, the account becomes frozen and the thieves will then overwrite the card data on the magnetic strip with somebody else's data that they've also skimmed illegally.
This whole process could fall down if shop assistants took the time to verify that the details physically printed on the card match those printed on the receipt, but this doesn't always happen. Also, the use of Chip & Pin will dramatically reduce the amount of skimming that is possible.