Thieves have discovered that taking money from a bank doesn't have to involve a risky life-or-death bank robbery -- not when ATMs (and innocent victims) abound.
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Welcome to the world of ATM skimming, a crime in which a victim's information is breached during an ATM transaction. Skimmers gain access to customers' bank accounts by equipping an ATM with a small, electronic card reading device. The "skimmer" is inserted into the slot where customers insert their ATM cards, and once the card is inserted, the skimmer reads the card's magnetic strip.
Thieves recently skimmed about $500,000 from customers in Washington, Oregon, Nevada, Arizona and Idaho through the use of ATM skimming devices, says Amherst, Mass., lawyer, professor and author Steven Weisman, a nationally recognized expert on scams and identity theft. And in 2010, four men stole more than $1.8 million from New York bank customers through ATM skimming.
These cases are not rarities. Experts estimate that ATM skimming costs consumers $1 billion annually, and this number continues to grow. The good news, says Weisman, is that there are ways to protect yourself against skimmers by knowing what to look for at the ATM. "A little common sense goes a long way," he says.
ATM skimming 101
"There are different kinds of skimmers. Sometimes tiny cameras are used to observe people as they put in their PIN. Other times, they'll have a very thin, basically duplicate keypad that they will put over the keypad," says Weisman.
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Bolder thieves have been known to attach a completely false front to an ATM machine, says
Mike Prusinski, a senior vice president for Lifelock, an identity theft protection service, who learned about this skimming method last year from a Las Vegas detective working on a related case. "The criminals actually got bold enough to put a complete false front on an ATM machine in a bank drive-through. People would stick their cards in, and up on the screen it would say, 'Out of service.' But it already read the information on the card."
The damage can be monumental as thieves have direct access to your bank account, and if you don't monitor your account often, your available cash can be tapped in a matter of hours.
Prevention in practice
Sharon Corsentino, 38, an attorney and partner at Calhoun Peña Corsentino, in Frisco, Texas, had her ATM card skimmed three years ago. "I went to use my ATM card and it got declined -- and I freaked out. Because my husband had just gotten paid, and I had just gotten paid, I was thinking, 'There is no possible way.'" After running her card through again, it was declined a second time, says Corsentino.
Then Corsentino did a smart thing: She didn't let it go or assume it had been a tech glitch. Instead, she called her bank. At first, she says, the customer service people at her bank acted strange, asking her numerous questions about her recent transactions but not giving her any information. When she asked for clarification, she discovered the problem.
"That day, I had gotten paid, and I had been issued just a regular paycheck from my employer. I had gone by the ATM to deposit it. At the same time I was depositing my check using my ATM card, somebody was using my ATM card in Chicago, and so it triggered the fraud alert for the bank," says Corsentino.
The bank had immediately shut down her card and was trying to contact her. "Apparently, I fouled up their game when I went to make a deposit," Corsentino says. "Even just in that short window of when they started using my card, they bought four tanks of gas, and they bought lunch, and they went either to a Walmart or a Target and bought a bunch of stuff, in just a flurry of activity."
Corsentino's bank, Bank of America, replaced her money within a day or two, she says.
Las Vegas small business owner, Lena Das, 45, was the victim of ATM card skimming just before Christmas two years ago after making a purchase at Walmart using her PIN. "I always check my balance from my phone. I happened to pull it up two days later and noticed there was a balance inquiry. I thought, ‘What is this? I never do this,' and then right after that, the money was taken out," says Das.
Luckily, Das only had a small amount of money in the account. "I did go to the bank, and I told them, ‘Look, I don't ever do a balance inquiry -- you can check my history. I never go to an ATM to do a balance inquiry,'" says Das, whose bank, Chase, returned her money immediately.
Chuck Somers, vice president of ATM security and systems for Diebold, says it can be difficult -- but not impossible -- for consumers to detect a skimming device on an ATM, but there are certainly things consumers can look out for.
- Keep your eyes open. "If you're looking at the ATM and it looks a little loose, or you see scratches or sticky tape residue," be wary, says Weisman. Thieves will often attach false fronts to ATM with tape. "I kind of pick around with my fingernail at the keypad to make sure there is not another keypad on top of it," says Weisman.
- Cover those keys. "If there is a skimming device on the card reader, there typically is a pin-sized hole camera that is mounted underneath the top of the ATM. The camera is there to capture the ATM user typing their PIN number. If a consumer notices a pin-sized hole on the top of the ATM, he should immediately contact the financial institution," says Somers.
- Pay attention to your accounts. Although federal laws do offer some protection when a bank account is skimmed, these protections are not as all-encompassing as the laws protecting credit card fraud. Most banks require account holders to notify the bank promptly after a fraudulent transaction has occurred; the longer you wait, the less likely you'll get your money reimbursed. Keep a close eye on your account for any unfamiliar transactions -- regardless of how small they might be -- and immediately follow up with your bank if something seems amiss.
- Opt for credit. "Whether going to an ATM machine or making purchases in a store, use a credit card" instead, says Prusinski. "That's the bank's money, so you're not liable for it. If somebody went and rang up $2,000 worth of charges, once you proved they weren't you, really all you are out is the time of proving it wasn't you," says Prusinski.
- Don't assume all ATMs are equal. "Be particularly wary if you're in a tourist area, because those are prime targets for the ATM thief. Use one that is inside a bank, as opposed to one that is just outside," says Weisman, who also notes that private ATMs are "particularly susceptible" to skimmers.
- Trust your gut. Corsentino urges bank customers to be vigilant and rely on their instincts. The minute her ATM card was declined, she knew something was wrong and notified the bank. "If your card is declined and you think it shouldn't have been declined, look into it a little more closely and see if you can figure out what's going on," says Corsentino.
- Be on the lookout for potential thieves. Don't assume the thief isn't watching you. Some skimmers use a combination of high-tech (by rigging the machine) and low-tech (by having someone on site Often thieves rig the machine so it doesn't work. When a customer attempts to use the machine, it won't accept the PIN. At that point, a "fellow customer " (the lurking thief) will step in and offer to help, gaining access to the customer's PIN.
- When in doubt, don't... Use the ATM, that is. The only way to prevent having your ATM card skimmed is to recognize that the machine has been tampered with -- and then walk away without using it, says Prusinski.
M&T Bank Corp., based in Buffalo, N.Y., recently announced the development of an anti-skimming device that it has installed on 400 of its 2,000 ATMs, called the "Blocker." The protective device consists of steel plates placed around the ATM card slot that prevent any fake card readers from being attached. Also, manufacturer Diebold also introduced a re-engineered ATM card reader cover that should thwart the attachment of artificial card readers.
However, remaining vigilant can only help ATM users. Although Corsentino's losses were reimbursed by the bank, she remains leery of ATMs. "I have definitely changed the way I pay. I tend not use my debit card as freely as I used to," she says. When Corsentino does use her ATM card, she looks closely at the machine to see if it looks normal before swiping her card.
Prusinski says this careful approach is the best precaution. "We move so fast, we're really not paying attention. Do I really know if that belongs there or not? So maybe I just think that's just the way the machine is. And so we don't question it," he says. "Really, the only way you can prevent falling to a skimming device in an ATM is to be able to recognize that the machine's been tampered with."