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ATM Scams Rise Dramatically

by . (Posted in: Fraud / Personal Finance News)

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Imagine watching the evening news and a video pops along with a news story about the ATM you use most often. You may have already seen your bank in the 5 p.m. news and if you haven’t, there’s a good chance you will considering ATM scams are on the rise in the United States.

Dumb Criminal of the Week?

Last week, folks in Nashville witnessed on their evening news a gritty black and white video of first, a crook who quickly attached a skimming device on a local bank’s ATM. He then added a false panel just above the key pad where PIN numbers are keyed so that the tiny camera would be blocked. He quickly darted off, waiting for his first victim. He didn’t have to wait long because within minutes, a customer approached the ATM. What happened next is certainly not what this crook had in mind.

The device actually fell off in the customer’s hand and apparently that customer recognized what was happening and took the failed the device to his car and drove away. A few minutes later, the crook returned to gather the rest of his equipment. Stories like these are on the rise and there are a few tricks of the trade these scam artists are incorporating, including waiting until the weekend to attach the devices because they know there’s no banking business going on. Not only that, but what’s most disconcerting is the thieves never get too far away from where they’ve attached their equipment. Especially for women who stop by their local ATMs on Saturday morning before heading off to the mall, this fees incredibly dangerous – and it should. It also goes to show why the Memphis man probably shouldn’t have taken the failed device with him – it could have ended far worse than it did.

Statistics Hard to Find

There’s also another confusing element when it comes to these particular crimes. Getting the information on statistics is difficult; in fact, one security analyst with Krebs Security says the latest numbers he’s been able to find date back to 2008; even then, it was estimated ATM fraud totals close to $1 billion each year.

There are other statistics, though. This week, Verizon Enterprise Solutions provided its own annual data breach report. It’s an extensive effort that delved into more than 600 security breaches in the past twelve months and one of the biggest threats is ATM scams involving skimming. It accounts for 30 percent of these instances. Meanwhile, in Europe, it’s security team, European ATM Security Team or EAST, revealed these crimes have grown 13 percent in a single year.

Europe’s Role

These numbers out of Europe are especially alarming because of the advanced technology that country has adopted. This also reveals just how easy it is for someone in the United States, where we haven’t adopted the EMV or “chip and pin” technology. Clearly the numbers provided by the Secret Service dating back more than five years can’t possibly be accurate.

In fact, the new technology has been in place a few years now and most European banks now have the much safer EMV enabled debit and credit cards. This makes it more of a challenge for criminals to clone the cards and virtually eliminates the possibility of skimming with stolen financial data gleaned from the cards. There’s been a push in recent years here in the states to get this new technology moving forward, but it’s yet to happen. One reason is the cost associated with making the transition.

Many merchants and retailers – especially small business owners – say the past few years in the recession has made it impossible to make these often – expensive changes. Instead, it becomes a crap shoot for these companies that are living on a prayer that they won’t be a criminal’s next target. The Verizon reports says as much. Wade Baker, managing principal of RISK intelligence at Verizon, said

If you look at the last two (Verizon annual) reports, a large majority of the data set was the point-of-sale intrusions at small organizations such as retail establishments and restaurants…

Costs and Time

Clearly it’s going to be a difficult transition and remember, it will take quite some time to get those changes in place once the U.S. is prepared. In the meantime, the same questions remain: how can we protect our credit card data and bank accounts from skimmers and other fraudsters?

You can take steps to ensure you don’t fall victim to ATM scams. The most obvious – and simplest – way is by using your hand to shield the keypad when you’re keying your PIN. Even if your card number is captured by a modified ATM, the thief won’t be able to use a camera to watch you key your PIN.

Unfortunately, scammers, cyber thieves and other unscrupulous criminals with just a basic understanding of technology can wreak havoc on consumers from anywhere in the world. The numbers continue to grow and while ATM scams are just one of the many ways of accomplishing this, it’s not the only crime designed to separate consumers from their money. It’s just another reminder that as consumers, we ll must stay a step ahead of the game and aware of what’s going on with our finances. This illustrates the importance of checking your monthly bank statements, credit card statements and credit reports. Everyone should be requesting their credit reports once a year.

It’s the only way you know for sure credit card accounts haven’t been opened in your name by criminals. Also, consider pulling copies of your child’s credit reports, too as this is yet another way criminals are taking operating illegally. Unfortunately, for too many young people, they don’t realize credit card accounts and even mortgages were opened in their names until they enter adulthood and realize that their identities were stolen years earlier.

If you do find yourself a victim of any of these financial crimes, including ATM scams, file a complaint with the bank and your law enforcement agency. The sooner you do, the more likely the crook will be caught. It really is about remaining vigilant.

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