Warning: ATM Fraud Is on the Rise


Here’s how to protect yourself from ATM skimming.

ATM skimming is on the rise, jumping 546 percent between 2014 and 2015, according to a recent report from the analytics software company FICO. Just how much money gets stolen annually via this route is hard to pinpoint, but some industry estimates suggest that as much as $2 billion a year may be lost to ATM skimming.

For those who aren’t aware, ATM skimming is the process of stealing debit card information – even PIN numbers – via electronic reading devices covertly affixed to ATMs.

But besides swearing off ATMs forever, what can you do to protect yourself from unscrupulous thieves?

[See: 10 Money Leaks to Shut Down Now.]

Never use a public ATM. That is, avoid going to an ATM that isn’t inside a bank. You know, those ATMs in convenience stores, gas stations, bars, malls and especially city streets, where often nobody’s around and thieves can easily go to work.

“These are so much easier for crooks to rig,” says Robert Siciliano, a Boston-based identity theft consultant. “The tampering may take place in the middle of a biting cold night when nobody’s around. Then the middle of the next night, the thief retrieves the data.”

Ian Kidman seconds that. Kidman is an ATM hardware engineer for HTx Services, a provider of ATM and IT infrastructure services based in Hauppauge, NY.

“Selecting the safest ATM is somewhat of an oxymoron. Cash machines are an attractive target, and thieves are willing to risk being caught regardless of the machine’s location,” Kidman says. “However, ATM machines that are located inside a bank vestibule, which is well-lit and has video surveillance, increases the risk for the would-be skimmer.”

He adds: “Major banks are [also] typically early adopters of security initiatives and measures that protect ATMs from fraud.”

And, besides, unless it’s an ATM owned by your bank, the fees to use it are probably sky-high.

[See: 12 of the Biggest Data Hacks of 2015.]

Be vigilant. If you are going to use a public ATM, examine the machine. True, there won’t be a flashing neon sign stating, “ATM Skimming, Step Right Up,” but there are signs to look for.

“Is the card slot slightly askew?” asks Philip Casesa, a product development strategist with (ISC)2, a Florida-based nonprofit that specializes in information security education and certifications. “Is the card slot not firmly attached? Try giving it a tug, if you can. Do some parts, such as the keypad, look newer than the rest of the machine? Are key parts a different color?”

If the answer to any of these questions is yes, you may want to find another machine, he cautions.

[See: 9 Scary Things Consumers Do With Their Money.]

Be proactive. “When using an ATM, cover the PIN pad with your hands while entering the PIN. While this only protects you from skimmers that use a camera or shoulder-surfing techniques, it is a good security practice,” Casesa suggests. Your magnetic strip data could still be compromised, but at least thieves won’t have the PIN number required to access your cash.

And, yes, while you might feel as if you’re insinuating to those standing behind you that you don’t trust them, “You’ll never see that person again, anyway,” Siciliano says.

If you retrieve your money and suddenly feel like something is fishy, maybe as you were leaving, say, you found yourself wondering whether you did notice something odd about the ATM, tell your bank. Don’t wait. Generally, if you report stolen money from your bank account within two days, you’ll get it all back eventually, except for possibly $50, according to a federal law known as the Electronic Fund Transfer Act. If you wait longer, like up to 60 days, you may be responsible for the first $500. Wait longer than 60 days and the bank won’t be held liable for your missing funds.

You can be proactive in another way, too. If your bank is going to send you an EMV chip-enabled debit card, or if you have one but haven’t begun using it yet, get moving. The chips contain a code that makes these cards harder to counterfeit.

Of course, thieves may eventually find a way to circumvent EMV chip technology, but that’s a worry for another day.