Scam Alert: ATM "Skimming" Scheme is Automated Thievery
By: Sid Kirchheimer Source: AARP Bulletin Today Date Posted: January 2006
Over six days last October, at least 700 residents of the Winston-Salem, N.C., area found that money was stolen from their bank accounts after they had used automated teller machines. The weapons used: portable debit card "readers" and miniature "spy" cameras.
"We had more than $3,000 taken," says Susan Harris, one of the victims. She discovered the theft when she tried to transfer funds to her son's account through her ATM. "The bank didn't have a clue until I contacted them. They didn't believe me at first—until they realized the funds were going to Russia."
Like thousands of bank customers across the country, Harris was a victim of ATM "skimming," a scam that led to nearly $3 billion in losses last year.
Usually, the crooks use a portable card-reading device—or "skimmer"—that fits unobtrusively over the ATM's card slot (or the slot for the card that opens the door to an indoor machine), says Boston police fraud detective Steven Blair. The devices, which are sold online for about $100, record the data on a card's magnetic strip.
Other devices for stealing data:
* A tiny camera that videotapes customers entering their PINs.
* A transparent sheet placed over the ATM keyboard that can record PINs.
* A framed laptop computer placed on top of the ATM screen with a look-alike screen featuring the bank logo and instructions for transactions.
Later, the devices are retrieved, and duplicate debit cards are produced (with PINs written on the back) and sold on the black market. The cards are used at ATMs around the world or for online transactions.
"Most of these scams are run by foreigners," Blair says. In a recent case a Romanian was charged with leading a skimming ring that, over two years, siphoned some $400,000 from residents of Massachusetts and New Hampshire.
"Over a 15-minute period, six withdrawals totaling $4,500 were made from my account," says a resident of Hooksett, N.H. Three withdrawals were for $1,000 each and three for $500. The victim was surprised because he thought the withdrawal limit was $200. He says his bank didn't notify him that the limit had been raised to $5,000.
Although banks usually reimburse victims of ATM skimming, it may take several weeks. To protect yourself:
* Avoid ATMs with new equipment protruding from or near the card slot. Avoid, too, machines with signs noting "new equipment." Such signs are often bogus.
* Cover your hand when entering your PIN.
* Ask your bank to set an ATM withdrawal limit on your account.
* Keep tabs on your account balance.
* Report ATM skimming incidents to your bank, police department or local Secret Service field office (www.secretservice.gov).
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