The best way to steal is the subtle way. No matter how it’s done, there’s a better chance to succeed if the victim never notices. That’s why modern thieves prefer more elusive and nonviolent methods, like cashpoint scams.
ATM Fraud is as old as the machines themselves. When you enter your credit card into an ATM machine and provide the proper associated PIN number, you should in normal circumstances establish a “link to your bank account” . However, once the scammer manipulates an ATM, he can intercept your credit card information and later empty your bank account.
ATM Fraud is spread all over the world and failry common. It is up to you alone to protect yourself from this and avoid financial loss. Read on to find out how it works and what you can do to minimize the risk of becoming a victim of an ATM scam.
- What Is ATM Fraud?
- ATM Fraud Techniques and Examples
- Guidelines To Avoid ATM Fraud
What Is ATM Fraud?
Someone can commit ATM fraud by stealing someone’s card, by jamming someone’s card in an ATM, or to manipulate the ATM machine in a different manner in order to obtain the persons credit card information. The perpetrator then accesses and withdraws funds from the account holder and commits the crime.
All they need to do is get the credit card data and PIN code. They can create a cloned cart and access your account anytime. The victim would never notice it unless they check their bank account balance frequently. The thief may also be able to change the credentials in some cases, and you could lose access to the ATM.
Despite the dangers, it would seem that the banks don’t look at the cashpoint scam with the attention that they should.
Although ATM fraud isn’t new, scammers find more ways to deceive users. Here are the frequent ATM scams you could find and how to avoid them.
ATM Fraud Techniques and Examples
Con artists love ATM fraud. The methods are low risk and high reward. The scam works well because it’s hard to recognize. They can install pieces that adapt seamlessly to the ATM. Thieves can manipulate the cash dispenser, card reader, or the whole unit.
Perpetrators could damage and put all ATMs out of service except for one. Everybody will have to go to the only machine available, the one he manipulated. The best way to prevent this fraud is to know how these tricks look like. Here are some techniques they use.
With skimming devices, the scammer can read the card holder’s information from the cards magnetic stripe. After recording it, he can uninstall the tool with all the data registered.
Looks like a normal ATM doesn’t it? What you don’t see at the first moment is that a skimmer (a false credit card reader) has been installed on the machine. This skimmer will now gather personal information and transmit it to the thieves. This information will be used to make a clone of your card.
To the right we see a plastic holder for envelopes or ads, but hidden on the back of it there is a tiny little camera which captures the moves of your fingers when you are entering the PIN.
An even smaller camera can be installed just about anywhere else on the ATM to record your PIN. Here is another example of a camera unit installed above the screen.
Thieves can also install a new panel on top of the real keypad. This keypad will record your keystrokes and in doing so reveal your PIN number.
Skimmers and shimmers have the exact same function. Aesthetically there may be no recognizable difference. Shimming is considered as sort of an update to skimming. In shimming the data is captured by tapping directly into an EMV chip on the card. Skimming uses the magnetic stripe.
You only need a thin panel to read the credit card’s chip. Once you insert it in the card slot, it’s unnoticeable. For the card user, it seems there is no difference. You put your card on a slightly tighter slot, transfer money, and get it out. In the process, the reader records all the card data.
A fraudster can take the device out to take the information, or it can be transmitted wirelessly. They can use the same data from the EMV chip and convert it into a magnetic stripe card, if they want.
As in skimming so in shimming, the whole ATM may be overlayed with a fake shell in order to make the atm scam even more elaborate and harder to recognize.
In the card slot, scammers install the so-called Lebanese loop. It’s a simple tool to prevent cards from ejecting once you insert them. You can make transactions, but the card will stay inside the machine. The thief has inserted another device on the card slot.
The only thing you should do is contact your bank, ask for help and possibly not leave the location. Otherwise, the wandering scammer will come to the ATM within seconds, remove the device, and run away with the card.
The same device can be inserted in the cash dispenser! When you finish the withdrawal operation on the ATM, funds will be deducted from your account, but the actual money will not be able to eject itself and will stay trapped in this device.
The problem for the scammer is that with this method the victim realizes the trick very quickly. It’s not as unrecognizable as skimming or shimming cards. Ironically, because of its simplicity, it’s one of the most common scams out there.
But what if you knew it was a trap? You could remove the loop, just like the thief would do, and solve the issue. But beware. If the observant thief notices, he may try to mug you on the spot.
This one is more a robbery than it is a scam. The thief will try to break the machine and steal the cash amount from the cash compartments.
Due to the risk, it’s not easy to perform. The usual plan is to have a group of thieves arrive in a vehicle with tools. They come late in the night and organize to finish as fast as possible.
Despite the aggressive approach, the bank clients don’t have any risk. The danger is solely on the side of the bank. If you notice a damaged ATM you should notify the bank and simply go to another ATM location to get your money out.
Conversion Fee Scam
This might not be considered a scam by our authorities, however we can rightfully call it a big shaddy scam. And if you’ve ever been abroad, you have almost certainly become a victim of this scam. Knowingly or unknowingly.
ATM operators make money by offering Dynamic Currency Conversion (DCC). DCC is a service that ATM operators offer to their customers. When abroad, you have and option to convert the withdrawal amount into your home currency or pick local currency.
Of course, if the money in your account is in one currency and the cash that comes out of the ATM should be in the local currency, your funds will be converted regardless of your choice.
The ATM operator is actually only asking for permission to make the conversion. You can and should gladly refuse.
- With conversion – means that the bank or company operating the ATMs carries out the conversion.
- Without conversion – means that your bank or credit card company makes the conversion.
Whoever makes the conversion applies an exchange rate. Determining this exchange rate enables them to make a deduction.
And that is the point. ATM operators tend to make large cuts. They offer poor exchange rates and you should let your bank at home do the conversion. The rate should always be a lot lower. In the very rare event it actually not, you should change your bank immediately.
ATM operators will be remarkably persistent in trying to get customers to choose their exchange rates and get them to withdraw as much money as possible. Furthermore, they will try to make the “wrong choice” more appealing or make the options very confusing.
Guidelines To Avoid ATM Fraud
Hopefully, you won’t find yourself in the middle of a “robbery“. The risk, of course, depends on the ATM itself, the company, or the city. You never know when it can happen. It’s better to come prepared, even if you’ve been using the same machine for years.
What To Do Before Transfering Money
The risk reduces exponentially the sooner you prevent these situations. Here are some preventive measures to follow.
Choose Your ATM Location
If your ATM never gave you any problems, you should probably stick to it. Go to a small number of locations to prevent uncertainty.
Check online or with you bank and see which locations are available. Be careful if the machines have been unavailable at some point in the past. There is a reason for it, however that does not automatically mean it was because of scam. The ATM might have just received regular maintenance or an update.
What if you are in another city or country? Are there people loitering for no reason? See if you can find a better location, no matter how over-protecting it may sound. Victims never expect to fall into the trap until they do.
Inspect The Machine
Now, you’ve seen some fraud cases and images above. Use what you’ve learned to spot the devices you can recognize.
Check the keypad or if anything is loose on the machine itself. Look if there’s any suspicious hole. Examine the slots to find potential card traps, including the shimming device. It’s a ten-second revision that will save you money.
How To Stay Safe While Operating The ATM
You don’t want nearby “surfers” to get your PIN code or steal from you. Every second you distract is an opportunity for the thief to grab the cash and run away.
Don’t be distracted or helped by persons near ATM.
Don’t only be aware of your surroundings. Be prepared already when you come. Arrive with everything organized so that you waste as little time as possible.
If you notice something strange on the ATM, it’s better to walk away. Perhaps the best you can do is to inform the bank employees nearby if there are. Show them what you’ve found so you can transfer money safely. If you do it alone, the thief may ambush you.
Cover The PIN
A loose keypad is usually easier to notice than a tiny camera. Once you are sure the keypad is real, cover it in case someone is recording. Unfortunately, it’s difficult to spot a camera. But it’s easy to prevent the risks with this habit.
Print A Copy Of Your Transaction
Even if you do everything right, some thieves can still be sly enough to trick you. Someone may steal your information and steal your money in the next closest ATM.
The sooner you take action, the less harm you can prevent. If you have an ATM receipt, you can save a lot of time in explanations when you report it to your bank. It can save you from losing the funds.
After The ATM Transfer
Check Your Balance Regularly
Revise your bank and credit card transfers from time to time. The #1 rule to get back stolen money is to act fast. The more you review your account, the sooner you can protect yourself.
Lower Your Withdrawal Limit
Banks take basic measures to save your money, even if you are unaware of a steal. If your cash limit is low, for example, the scammer will access your account, but only steal a small amount.
Unless you usually need to have a high limit, it is better to reduce it.
Diversify Your Savings
People use money for daily expenses. But that doesn’t mean that you should keep all your fortune in a bank. If you want, you can create multiple emergency accounts to protect them.
You may also work with more than one bank. Or keep your money elsewhere or in passive investments.
Protect Your PIN
Many thieves can find smart ways to get your card information. If you have the PIN on your wallet or your phone, it’s a risk. Memorize your code, and don’t save it virtually. It’s safer to keep it written on one paper you don’t bring anywhere.