What is ATM skimming? How to protect yourself

HHundreds of thousands of Americans had their debit cards compromised last year after falling victim to ATM fraud — and the problem is only getting worse.

Skimming is a type of fraud that takes consumers’ credit and debit card information from automated teller machines (ATMs), gas pumps and ATMs. O Federal Bureau of Investigation says it costs consumers and financial institutions more than a billion dollars a year.

“We are becoming a cashless society, so we rely heavily [on cards],” says Ahmed Banafa, a professor at San Jose State University and cybersecurity expert. “When they get this [card] information, in seconds they can make purchases, withdraw money and sell [card information] on the dark web. People will never know this unless they get an alert, check their credit report or receive a message from their bank.”

Authorities are working to crack down on the practice of fraud. On Tuesday, four foreign nationals were charged by the federal government for allegedly installing skimming devices at bank ATMs and store checkouts in at least six states, the U.S. Attorney’s Office for the District of Rhode Island said. announced. A fifth defendant is in the custody of the U.S. Marshals Service and an arrest warrant has been issued for the sixth. But the problem is still significant. In a March report, FICO found that the total number of debit cards compromised rose 96% from 2022 to 2023 due to skimming.

Here’s what you should know.

What is skimming?

Banafa describes ATM fraud as “identity theft of your credit and debit card.” He says scammers often use an “overlay” that is placed on ATMs or ATMs where consumers insert their cards to obtain people’s credit card information.

Skimming devices are similar to regular card readers, although the FBI notes that they can be more convex, while real readers are concave. Scammers can also install small cameras to track people’s PIN numbers.

“After a few days, the criminals will arrive at the location or stand next to the machine and begin downloading the information,” says Banafa, although others are much more advanced in their fraud schemes and can send information via Bluetooth.

Once they have the card information, they will likely use it to make purchases, but they may also sell it to others.

How common is this?

More than 315,000 cards and at least 3,500 financial institutions were impacted by skimming in 2023, according to FICO.

The practice is also particularly easy to do. Banafa says scammers can 3D print an overlay device, which they can install while distracting store employees. Card information can even be transferred wirelessly in some cases, meaning the culprits don’t even have to return to the store.

Most card compromises occur at non-bank ATMs, many of which can be found in convenience stores or gas stations. However, there has been an increase in bank ATM fraud between 2022 and 2023, as they now represent a third of all compromised fraud locations.

Virginia, Texas, New Jersey, Florida and Colorado reported a 50% or more increase in debit or credit card compromises – with Virginia and Texas among the top five states for skimming activity. And despite California reporting significant reductions in skimming activity, they still top the list as the top state with skimming activity, according to FICO.

EBT and other public benefit cards are more attractive to skimming groups because they do not have a chip, which works as a tool to make safer payments. “EBT cardholders generally have limited protections compared to regular credit and debit cardholders,” the FBI states. “As a result, they may not be reimbursed in full or at all for benefits lost to criminals. This, in turn, may worsen existing financial difficulties.”

How to protect yourself

It is important to be careful when entering your credit or debit card. Some telltale signs of a skimming machine may include strange wires or a particularly bulky or loose slot for inserting a card. “Try going to an ATM where someone can see you are there, or a gas station pump where the attendant can see you [scammers] we can understand that they are monitoring this,” says Banafa. He also suggests that people avoid ATMs in areas with lots of tourists, as they can be access points for skimming.

The FBI suggests that people also try using their debit cards as credit cards or covering their PIN when they enter it if that’s not an option. If the keyboard is an odd shape or color, this could also indicate that a keyboard overlay has been placed.

“If you’re not comfortable with it, whether it’s in-store, at a stand-alone ATM or at the gas pump, don’t do it. Go somewhere else, you know,” says Banafa. “And at the same time, tell the system, ‘I think there’s something wrong with this.’”

The FBI also suggests that people make purchases using third-party payment options, such as Apple Pay, Google Pay, or PayPal, when purchasing an item at checkout. “When your credit card information is saved on these companies’ servers, it generates unique information for that transaction, and that number is useless once used for that transaction. [purchase]”, says Banafá.

Any suspicious activity on a card should be immediately flagged to the bank as some fraudsters use the card to check whether small purchases can be made or will be flagged before they attempt to purchase more products. Signing up to receive fraud alerts or even purchase alerts can also be a good protection tool.

“Don’t underestimate this,” says Banafa. “All [scammers] What we need to do is just get your information once, and now we have to deal with the consequences on your credit report.”