ATM Skimming on the Rise

Source: The Frederick News-Post Online - Frederick County Maryland Daily Newspaper

ATM card skimming on the rise
Originally published May 27, 2009 By Ike Wilson | News-Post Staff

ATM card skimming on the rise

The PNC Bank automated teller machine at 191 Thomas Johnson Drive was rigged with a skimming device in April, Frederick police said.  It's called "skimming," and ATM users worldwide are losing millions. The ATM Industry Association describes skimming as one of the industry's most recurrent fraud threats.  The practice hit Frederick in April, when the PNC Bank automated teller machine at 191 Thomas Johnson Drive was rigged with a skimming device, Frederick police said.

The hardware recorded card numbers of customers using the ATM. Police think a video recording device was placed near the ATM to capture personal identification numbers entered into the machine.  PNC Bank spokesman Fred Solomon said bank policies prohibit him from speaking about security or theft matters, including details about how many were affected by skimming at the Thomas Johnson Drive branch.  Customers with unidentifiable transactions on their statements should contact their local branches, Solomon said.

Just over 4,500 of the 11,360 ATM crimes recorded by the ATM Industry Association Global Cognito crime data management system for 2005 through 2008 involve skimming, according to association CEO Mike Lee.

"It's probably the most widespread crime type we face," Lee said.  The association defines skimming as the unauthorized capture of magnetic strip information by modifying the hardware or software of a payment device, or through the use of a separate card reader.  Skimming is often accompanied by the capture of customer PIN data.

Skimming is one of the financial industry's fastest-growing crimes, according to the U.S. Secret Service, which investigates bank fraud.

The ATM Industry Association has reported more than $1 billion annually in global losses from credit card fraud and electronic crime associated with ATMs.  Last week, the ATM Industry Association launched an international Anti Skimming Forum to counteract the growing trend.  Skimming is a problem that will continue to increase until technology brings it under control, Lee said.  "The technology exists today to help defeat the problem," he said.

According to Bankrate.com, ATM skimming devices come in two types: ones that interfere with the ATM operation and ones that don't. The skimmers that interfere with the ATM operation are easier to detect, because even though customers insert or swipe their cards, it's not the ATM's card reader so the ATM isn't actually being used and the customer isn't getting any money.

In other skimming cases, the thieves don't interfere with the normal operation of the ATM. The skimmer is placed over the card reader but doesn't block off the reader, and the customer gets money when making a withdrawal.  Credit and debit card abuse may also happen at cash registers during purchases.  Pay a restaurant tab with a credit card and you have no idea what the waiter might be doing with the card when it's out of your sight, according to Bankrate.com.

The mission of the ATM industry's new forum is to measure the global impact of skimming through the pooling and analysis of data. It is also to write best practices for preventing and reducing skimming. This will include a global skimming classification system. Industry officials also want to increase sentences for skimming convictions to create a stronger deterrent. Lee thinks more can be done in terms of educating customers to protect their PINs by covering the hand used to key in the PIN at an ATM so someone cannot learn the code. This simple measure alone would significantly reduce the success rate of skimming attacks, he said.

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