By Kelly Twedell Published March 15, 2010 Credit Unions Online
Fraud awareness has heightened over the past few years, identity theft usually comes to mind and many have taken extra precautions to protect their personal information. Currently the fastest growing electronic crime, that costs banking institutions and consumers $8 billion annually, according to the U.S. Secret Service is a practice known as ATM skimming.
ATM Skimming thieves use the ATM itself as their tool utilizing the miniature cameras, card readers and keypad overlays to perform their crime. These crimes are not necessarily committed by those that are savvy with electronics or computer systems - today skimming equipment and training guides are for sale via the internet. The internet offers anonymity where it is easier than ever for crooks to operate at a lower risk than traditional means for stealing money. With tighter security systems and personnel in place it is easier to withdraw thousands of dollars from a bank account than robbing a bank within seconds or several times over a period of a few days.
The thieves can place a skimming device over the ATM card reader that blends in well with the machine’s appearance and does not disrupt its operation for the consumer. The device is able to read personal financial information from the magnetic stripe on the back of the card. A keypad overlay or small wireless camera camouflaged near the ATM’s fascia captures the user’s PIN. Information from the device is sent wirelessly to the criminal’s laptop nearby the location never giving the ATM user a hint that their information has been compromised.
The stolen account information in then uploaded onto the magnetic stripes of purchased blank cards that clones your card information. The passwords are then written on the face of the cards to keep them linked. These new cards allow thieves to access your cash or make internet purchases.
When someone is in line at an ATM you generally give them the courtesy of privacy, so often these thieves go unnoticed as they simply install their hardware onto the ATM’s. Most banks are closed on evenings and weekends and that makes them an easy target.
An Ounce of Prevention
With few exceptions, financial institutions are required to reimburse consumers’ losses, but many times the damage is done. Many victims do not even realize they have been attacked until they receive a credit card or bank statement and realize the discrepancies.
Recently two banks in Pennsylvania reported a sticky residue found on their ATM’s. Sure enough, $20,000 was reported missing from an estimated 36 accounts between the two banks.
Now that banks are aware of this fraudulent practice many of them have implemented more security measures that include physically inspecting their ATM’s daily, even on weekends to spot any irregularities.
Many banking institutions have cameras installed as a deterrent, but many of us have been guilty for using the stand alone ATM’s inside gas stations, clubs or restaurants out of convenience that are not electronically monitored.
Skimming can affect more than 400,000 ATM’s in the United States alone and is a growing threat. A good way to protect yourself is to set a limit on the amount that can be withdrawn per day from your account. Beyond that, the consumer also should be more active in checking their account activity.