t's just one tip of the iceberg, but seven people have been indicted and five arrested in Miami and Orlando, Fla. in a credit card skimming scheme. Two of those arrested were the waitresses who craftily swiped customers' cards into encoding devices; they were paid $20 for each card from which they skimmed information.

The United States Secret Service says the fastest growing form of fraud, and one of the fastest growing crimes in the United States, is credit card skimming. The advent of compact, palm-size encoders has made the process of swiping a card, once legitimately and a second time for the purpose of siphoning information illegally, as easy as ... swiping a credit card through a POS terminal. More recently, bugging devices that affix inside the terminals themselves have made it even more difficult to catch those doing the skimming.

Skimming is a worldwide problem that occurs most often in restaurants. Diners hand over their cards at the end of their meals and waiters whisk them off to run through the POS system located somewhere in the establishment. The cards are out of the owners' hands and vision for minutes, and it takes only a couple of seconds to get all the information necessary to forge cards.

Credit card skimming is a crime that by nature has an international flair - card information is stolen in one location and then travels the globe electronically to be made into fake cards that are then sold and purchased, often several times. Interpol, the international criminal police organization that oversees universal classification of counterfeit payment cards, has worked with MasterCard International on a training guide for its investigators.

Here in the United States, legislators at the federal and state levels are writing and passing laws to make the consequences of being caught skimming more serious. POS equipment manufacturers, card issuers and payment processors are developing terminals, software and systems to make it more difficult for skimming to take place in the first place.

Yet, despite the increasing frequency of card skimming and the financial implications for all involved, not everyone is embracing these solutions.

According to California State Senator Dick Ackerman (R-Tustin), California has the highest number of identity-theft victims in the U.S., of which credit card skimming is merely one form.

Ackerman authored legislation creating stricter penalties for card skimmers; it was approved by committee and most likely will be passed into law this year. SB 1259 will make it easier to prosecute criminals in California who are in possession of scanning or re-encoding devices with the intent to defraud. The bill carries penalties of up to one year in jail and/or a $1,000 fine.

But Florida seems to be the real hot spot when it comes to this particular brand of fraud. South Florida in particular, according to the U.S. Secret Service, has become the skimming capital of America. As a branch of the U.S. Treasury Department, the Secret Service investigates and prosecutes financial and electronic crimes. It estimates that the cards of one out of five people in South Florida have been tampered with and that restaurant customers were hit for $1 million a month in 2001.

A year later, that amount has increased to between $1.5 million and $1.75 million a month. Those figures don't include costs resulting from law-enforcement expenses like investigation, prosecution and housing criminals.

Arrests in this recent case were the result of indictments handed down by the Sixteenth Statewide Grand Jury and stem from a four-month investigation conducted through a statewide task force called Operation LEGIT (Law Enforcement Getting Identity Thieves), which is comprised of personnel from the Florida Department of Law Enforcement, Florida Highway Patrol and Office of Statewide Prosecution.

The ring recently broken up in Florida involved not just the waitresses but a series of people responsible for carrying out the scheme. The women skimmed the information and were paid, and the stolen numbers were then sold for $30 to be turned into a card or sold as lists of numbers for $80 each. In the end, phony credit or debit cards sell all over the world for $500 or more.

George Devitt, CEO of CardSwipe.net, a transaction-processing provider, said his company is wrapping up a pilot for a tabletop system that will eliminate card skimming. With this system, servers bring the POS terminal to the customer so the card is never out of possession or sight.

Orion Commerce Group is a software development firm and Hypercom value-added reseller (VAR). Their pay-at-the-table solution is designed to run on the ICE4000 line. Rick Stroud, president of Orion, said his company is completing a 60 day beta with zero failures in preparation for roll-out in October.

Coincidentally, both companies are based in Florida, where both pilots are also taking place. CardSwipe, with headquarters in Altamont Springs, is testing in Orlando. Orion and its test site are located in Tampa.

"Right now, the CardSwipe system is being tested very successfully in one restaurant in the United States. We have about 30 days to go in the pilot, and we have 75 restaurants ready to sign up," Devitt said. "These solutions prevent skimming, which can result in a monetary fine from Visa or MasterCard or can even result in the merchants' card-acceptance privileges being revoked.

"The pay-at-the-table devices are already widely used in France and other parts of Europe, where skimming has been virtually eliminated."

Solutions based on wait staffs bringing POS terminals to the table are not being embraced wholeheartedly by restaurateurs and hospitality associations. Jot Condie, Vice President of Government Affairs and Public Policy for the California Restaurant Association, thinks legislation mandating the use of tabletop POS equipment is a bad idea.

"There will be establishments who will go out of business because of the expense of having to install new machines. Lots of small restaurants just won't be able to afford it, " Condie said. Stroud agrees that most restaurant operators can't afford to just get rid of their existing systems in favor of table top POS.

The challenge for Orion has been to "stabilize software and write code to integrate with touchscreen POS applications," he said. As far as I know, ours is the first system of its kind in the world. Our software integrates with and is designed to function with touchscreen POS applications like ALOHA. Restaurants want an overall solution. They don't want two systems."

Condie also feels that requiring pay-at-the table POS would complicate the job duties of already frazzled wait staffs, he said, if they have to bring a terminal to every table at the end of each meal.

Devitt said that restaurateurs who see this as a bad thing are "ill-informed and missing the opportunity. Beyond the issue of skimming, there are other benefits to the restaurant in using the tabletop systems."

CardSwipe.net's system uses hardware from manufacturers like Hypercom and VeriFone and its own proprietary software with industry-specific features and encryption capabilities. Customers also are able to use ATM/debit cards to pay for meals at the table.

"We found in our pilot that 50 percent of transactions are debit. The pay-at-the-table devices makes using debit cards possible, and that means dramatically reduced processing costs for the business - the owners pay only 20 to 30 cents for debit transactions," Devitt said.

The Orion system also works with credit as well as debit transactions. "The restaurant operators understand they're getting beaten to death with debit transactions. This system lowers those fees for the businesses," Stroud said.

CardSwipe's software includes a feature that automatically calculates and makes suggestions on tips. Using the same terminal, Orion's system lets servers input the orders right at the table, so it's accessible immediately to kitchen staff, speeding up the process.

"Our experience in the pilot is that the wait staff is better off," Devitt said. "They don't have to make so many trips back and forth to the fixed-location card terminal, so they can turn tables faster. The software is designed to automatically calculate and make suggestions on tips. There is certainly an initial investment in the devices required, but for the average restaurant, even if you take skimming as a separate issue, the pay-at-the-table systems make sense."