The Rise of ATM Scams

ATMs are no longer just a novelty. Today these machines have long been integrated and are now a part of  standard banking. Automated cash machines are not only adjacent to banks, but can be found at malls, airports, various venues and other public spaces. Millions of people use them daily.

Along with most things technology, the convenience and ease of accessibility with ATMs brings a level of risk. Anyone using an ATM should proceed with caution. Many of us do not think twice as we slip our cards inside the machine and withdraw cash from bank accounts. While not a new form of theft, a number of reports have emerged in recent years about ATM fraud being on the uptick.

Thieves have developed a number of ways to steal cash after a person attempts to use a machine and, as technology gets smaller, faster and more efficient, the thieves get savvier and find ways to use (more like misuse) it.

Fake ATMs

Fake ATMs often look like the real thing and schemers do a good job in making these look like their devices are a part of a legitimate automated teller machine. There is no money to be withdrawn from these machines because criminals have placed the fakes with the full intent to steal information swiped from the card.

After a user attempts to withdraw money from one of these machines, generally some sort of error or an "out of cash" message displays. The error message quickly disappears once the recording of data is completed. Many users don't even know they were scammed.


Credit: Leigh Goessl/All rights reserved

ATM Card Skimmers

The use of ATM card skimmers have also been on the rise. Card skimmers are devices that are placed on top of or inserted into legitimate ATMs and are often difficult to detect. These gadgets intercept information from the card, and are usually used in conjunction with a small surveillance camera that is in the vicinity recording PIN numbers entered by the user.

In February 2010, a bank in Alexandria, Va. was victimized when a thief placed a card skimmer over the bank's card reader and swiped all the information on every ATM card inserted; customers reported over $60,000 in losses as WUSA 9 had reported at the time. 2

In July 2011, two men were arrested in connection with an attempted ATM skimming, which occurred in June in Darien, Connecticut. One of the men detained is believed to be responsible for a total of 26 skimming frauds located in Rhode Island, Massachusetts and Connecticut.

More recently, in March 2014, four people were arrested in connection with a $1 million bank ATM scam in Quebec and Ontario. This scam was reported to have been ongoing since 2008 with 200 machines affected.

These are only a handful of the incidents which have been reported in the last few years. This scam is getting more and more sophisticated every year. If you Google "ATM skimmers" and sort by the most recent stories (i.e. past year), it's amazing how this type of fraud is evolving and how many skimmers are found on a routine basis.

Credit: Leigh Goessl/All rights reserved

A street-side ATM located at a bank in Washington D.C.

On July 7, 2014, Krebs on Security reported skimmers are getting "smaller and thinner", and experts say these devices are getting harder to detect because they fit right inside the legitimate ATM slot.6

Tips to Avoid Being Scammed

ATM scams have become more common as electronic financial transactions continue to be more heavily used in our digital society. Users should be prudent when it comes to using ATMs. This is not to suggest cash machines should be avoided, just that care should be taken when using them. Anyone who does any sort of banking via ATM should be aware of possible scams and recognize the warning signs so in the event of a problem, it can be reported immediately.

credit cards
Credit: CircoD/Pixabay

Experts recommend these tips:

  • Routinely use the same ATMs and become familiarized with both the machine and its surroundings. This way you are more apt to notice if anything seems different.
  • Use indoor ATMs at the bank; these are less accessible to scammers.
  • When you do use an ATM, always examine to see if there appears to be anything glued on the machine or inserted in it; many of these attachments are very difficult to detect, but some of them are noticeable if you're looking.
  • When entering a PIN, look around for a camera, or even a person, lurking about, and always cover your number with your hand. Krebs on Security noted in its report, "you’d be surprised at how few ATM users" shield their PINs.
  • If your card is eaten by the machine, if possible, do not leave the ATM, but call the bank from your mobile.

Additionally, keep an eye on balances, some of the scammers are skipping the localized ATMs and going straight for the bank's internal systems using a newer ploy called "ATM draining" as CBS News reported in April 2014.1

Most ATMs, like other technologies, offer many conveniences, but these benefits do not come without some drawbacks and level of risk. However, understanding ATM fraud, and what to do if you suspect anything is amiss, helps protect both your and other potential victims' bank accounts.

Related Reading:

Does Society Take Identity Theft Seriously Enough?

How to Avoid Telephone Banking Scams