Monday, September 3, 2012, AM | 5 Comments
Over the years, we have become so accustomed to ATM we have begun to take it for granted. Any time, day and night, we need cash, we don’t wait till the next business day when banks open and we withdraw the cash. We go straight to an ATM (Automatic Teller Machine).
An ATM offers convenient access to your cash 24/7. And that also makes it a tempting target for criminals who have found ways to use technology to tap into people’s accounts and steal their money.
The Global ATM Security Alliance, an industry group, says such crimes affect only a tiny fraction (less than 0.2%) of the roughly 49 billion ATM cash withdrawals made worldwide each year.
But ATM fraud still costs the U.S. banking industry in millions, fast approaching $200 million a year. If you fall in that 0.2% of ATM crime, in my opinion, that’s one too many.
What is Skimming?
Surveys after surveys suggest most people are either unaware of the scam or they are too careless to take necessary precautions to prevent it.
Skimming has been around since the late 90’s and has become more popular with the advent of smaller, more compact technology. If you slide your ATM card into a skimmer, it will read all your account information stored electronically on the magnetic stripe.
It may even record your personal identification number or pin as you punch it into the keypad. The next thing you know your checking account is wiped out. It’s called skimming and with a small device, your card’s information gets stored so that criminals can easily get to it later.
Skimmers may be installed on ATM machines, and sometimes you can’t even notice them. A small device goes over the normal card reading slot and reads your card’s magnetic stripe.
Skimmers can also be hand-held devices that a dishonest merchant can keep in his pocket. While charging your card while you are out at dinner, for example, a scammer can run your card through a skimmer as well.
The following are different ways of skimming:
Skimming via fake ATM card reader
The first things skimmers need are your name and account number, which they can get from the magnetic stripe on your bank card. They can do this by using a card reader of their own, installed over an ATM’s built-in reader. Less sophisticated scams may use separate readers with signs or stickers directing consumers to use the bogus one instead of, or in addition to, the one mounted on the ATM.
Skimming via cell phone
Thieves also can employ advanced devices that transmit skimmed card data via cell phone. That way they don’t risk detection or arrest by coming back to retrieve phony card readers or other devices.
Skimming via camera
Another way to get your personal identification number, or PIN is by installing a small video camera that can record your keystrokes as you punch in your code. Tiny cameras have been found hidden on ATMs themselves or mounted nearby.
Skimming via fake keypad
Another way for a crook to get your PIN is by overlaying a device on top of a legitimate keypad. Such fake keypads are thin and can look and feel much like the real ones they are covering. And each key press on the overlay triggers the real key below it, so your transaction proceeds normally.
Skimming via sneaking a peek
Some thieves use a low-tech approach to get your PIN called “shoulder surfing.” It involves someone standing behind or beside you who watches you type in your code.
Also, the American Bankers Association recommends that you cover your hand when punching in your PIN. Get in the habit of doing it even when no one else is around, because the same technique also may thwart any hidden camera trying to record your keystrokes.
Skimming via false friends
If the ATM you are using doesn’t return your card, be careful if another customer steps up and tries to help you. Sometimes a scammer will pretend to offer assistance as a way to trick you into revealing your PIN.
Skimming via email and phone
Also, do not give your PIN to anyone who phones you or e-mails you. Often thieves will steal a card, then contact the cardholder, pretending to represent the issuing bank or the police. Their real goal is to get a PIN number to go with that card.
You can also make their job harder by memorizing your PIN, rather than writing it down and keeping it with your card.
Skimming via trapping your card
ATM makers say a thief may use a device that looks like part of a card reader to trap your card, with the aim of retrieving it after you leave. If this happens to you, don’t re-enter your PIN. Instead, report the matter to your bank or credit union right away.
Skimming via trapping cash
Another trick involves putting a false front on a machine to intercept the cash you are withdrawing or depositing.
Skimming via DVD rental kiosks
ATMs are not the only machines being tampered with by thieves. Phony card readers have been found on DVD rental kiosks and on card-activated pumps at gas stations.
Is anybody doing anything about skimming?
Banks and ATM manufacturers are doing what they can to prevent skimming. Some banks in Europe have started issuing cards that use chips, rather than magnetic stripes, on the theory that such cards are harder to read and clone.
ATM manufacturer Diebold has developed a sensor system for detecting the presence of a skimmer. Diebold and NCR, another ATM maker, also have developed machines that intake cards in a jittery motion meant to prevent skimmers from working. Still, the threat is constantly evolving.
What you can do to prevent skimming in your finances…
By knowing what to look for and being alert whenever you use an ATM, you may be able to spot skimming devices and avoid being scammed.
Banks recommend that you regularly check your account balances by going to their online banking sites, by phone or by printing out statements at an ATM. That way you can quickly spot unauthorized transactions or fraudulent use of your cards.
If your card is lost or stolen, or if you find that someone has been making unauthorized withdrawals from your account, you should report it to your bank right away.
Remember that your liability for fraudulent use of your card depends on how quickly you report the loss. Wait longer than 60 days, and you could be on the hook for the whole amount.
The American Bankers Association recommends that you keep a list (in a safe place) of card numbers, PINs, expiration dates and the toll-free numbers of your banks. That way you can report any problems quickly and easily.
In a Nutshell
Because thieves are getting more daring and the technology available to them is getting better all the time, even the most careful consumer can be fooled.
So be extra careful.Facebook.com/doable.finance