What is ATM Skimming and How to Avoid It

Identity thief skimming from an ATM

Do a search of the news on “ATM skimming” and you’ll find at least one story a week, if not more, on how ATMs are under siege from identity thieves using a method called skimming.

Skimming is basically a method whereby a thief uses a remote device to steal your personal identification number (PIN) and savings or checking account number. With over 400,000 ATM’s located throughout the United States, ATM skimming is bad news for banks and its customers.

According to figures from 2008, which is the last year for which the Secret Service released relevant figures, ATM skimming theft cost banks in the United States close to $1 billion in annual losses and the problem has only been increasing. The number of cases that have been reported has grown nearly ten percent per year and security experts believe that ATM skimming will continue to grow, particularly with the advance of technology.

While skimming has been around for over ten years, the technology that thieves are using get better by the year, yet banks have been slow to adopt anti-skimming solutions. While you’ll more than likely get reimbursed for any money stolen as a result of an identity thief stealing stealing your information so long as it’s reported to the bank as soon as possible, the process of recouping your money can be time consuming and stressful. It should also be noted that business customers may have a more difficult time recouping their loses due to their money having less protection.

How ATM Skimming Works

An ATM skimming device, which looks virtually identical to a real card reader, next to an ATM

Typically, a thief will install a small device that is usually undetectable by an ATM user as the device is meant to blend with the ATM’s face. The ‘skimmer’, which looks just like the factory-installed card reader, has the ability to read the magnetic stripe on a customer’s debit card. These devices are readily available to be purchased over the Internet for less than $300 in some cases.

To get a user’s PIN number, the thief either makes use of a hidden camera that’s installed near the ATM, allowing easy viewing of the user as they punch in their numbers. If you think obstructing the camera’s view is an effective way to foil the would-be thief, think again. Apparently, software that makes use of “spatio-temporal dynamics” can be used to analyze the recorded video and gauge the distance from the fingers to the ATM’s keypad and then approximate which numbers have been punched in.

Another technique that thieves use to get a PIN is the use of a phony keypad that’s placed on top of the real one and has the ability to record every keystroke.

The most basic skimmer has at least one flash-memory, battery-powered data-storage device where all the information gets recorded. With this type of device, data can usually be recorded for at least a few hours, up to a day, at which point the thief has to physically pick up the device. However, as mentioned earlier, these devices are getting more sophisticated, and more of them are making use of bluetooth technology which allows the data to be transmitted from a few dozen feet up to a few hundred meters away from the ATM. This means that the criminal can be in their car, at a hotel, in their apartment, or anywhere within range of the device, without ever having to go back to the ATM to retrieve their skimmer.

The thieves then take the information that’s stolen from the magnetic stripe and encode it onto blank cards. Criminals can then make withdrawals from a victim’s account with these blank cards and the PIN’s that were stolen.

How to Protect Yourself from ATM Skimmers

So how can you stay a step ahead of the bad guys?

The best thing you can do is to make sure and pay attention to your statements. Online banking has made this task simple; not only can you check your accounts from the convenience of your home, but you can also set up alerts to let you know when any type of transaction has occurred. The quicker you file a report, the less liability you have.

According to the FTC, if you report unauthorized transactions within 60 days, but have not lost your card, then you are not liable for any of those transactions.

Also, try to avoid privately owned ATM’s, since they are the highest at risk of skimming due to the fact that they can be added to the ATM by the owner. Also, avoid ATM’s in dimly lit areas or obscure places as they can be more easily tampered with.
When using an ATM, take a moment to examine it. Try pulling on the card slot to see if it’s loose as well as checking the PIN pad to see if it moves – if either seems suspicious, move on to a different ATM. If the card reader is a different color than the rest of the ATM, that’s another warning sign.
You should also cover the PIN pad with your hand when entering your passcode – while it won’t prevent a PIN reader from stealing your information, it can at least help to prevent the code being caught on video.
Remember, there are over 400,000 ATMs in the United States and every one of them, to some degree, is susceptible to fraud. It’s important to take the proper security precautions as the speed and convenience of skimming technology has greatly surpassed the security of technology.

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