Each year, ATM skimming causes millions of dollars to be stolen. This type of fraud causes losses that are typically covered by financial institutions instead of the debit/ATM cardholders and has become an increasing threat. An NCR spokesman noted that in one report that global losses are estimated to be over $3 billion. Last year, FICO identified a 174% increase of card and PIN-skimming compromises at U.S. bank-owned ATMs compared to 2014.
Banks, especially, should keep a close watch on the ATM skimming threat. According to the Federal Trade Commission, a customer is only liable for $50 if they report the theft or loss of a card within two business days. If the victim reports the theft or loss after two business days, but less than 60 calendar days, their liability is limited to $500.
With ATM skimming on the rise, here the main forms of ATM skimming described in detail and various ways to protect your account and card from being skimmed:
4 Most Common Skimming Methods
Here is a list of the 4 most common ATM skimming methods according to the Banking Exchange website:
- Stereo skimming: Two data-read heads are used concurrently, one that records both the card data signal and the jamming signal and the other records only the jamming signal. After, the latter recording can be applied to strip away the jamming from the card data.
- Digital skimming: A device that duplicates the magnetic stripe data, encrypts the data, and transfers the data to the fraudsters computer, who then uses the information to make counterfeit cards.
- Analog skimming: This data is stored as an audio file by using an MP3 or MP4 player, which is then transformed into digital data.
- Card trapping: The fraudster inserts a device into the card reader entrance, which captures the card so the cardholder cannot recover it. Once the victim leaves the ATM, the criminal comes to the ATM and steals the card.
4 Ways to Protect Against ATM Skimming
- Monitor your account frequently: Checking your online balance every few days can reduce the damages in an instance of fraud. If your bank offers an activity alert, be sure to utilize it to help flag down any unusual activity associated with your account.
- Safeguard your PIN: Protecting your PIN is crucial against criminals. A skimmer has the capability of getting your card number, but cannot access your PIN without observing or recording you as you type it in. The easiest method of protection is to cover the PIN pad when typing in your PIN.
- Use visible ATMs: It is recommended to use ATMs that are in full public view and ones that have video monitoring to protect against skimming possibilities. These ATMs are not targeted as much as ones that are hidden or do not have security measures installed around them.
- Look for ATM abnormalities: Be on the lookout for any changes on the ATM, such as new decals, holes, or changes in surfaces on the PIN pad. If anything looks suspicious, alert the bank and use a different ATM in the meantime.
ATM skimming attacks can occur anywhere and both banks and consumers need to be on alert for potential occurrences. By becoming knowledgeable on the main forms of skimming and learning the best methods to protect against attacks, both banks and consumers can protect their confidential information and avoid becoming a victim of fraud.