Fight Back Against ATM Skimming

CSCU
August 16, 2010 | COMMENTS

According to Javelin Strategy & Research in Pleasanton, California, nearly 20 percent of all debit or credit card fraud victims had their PIN information stolen in 2009—a 16-percent jump over the previous year. These numbers show ATM fraud, especially skimming, is a growing problem for financial institutions.

Skimming occurs when thieves place a fake magnetic stripe reader over the real magnetic stripe reader on an ATM to steal PIN numbers and account data from inserted cards. Another technique uses spy cameras or Bluetooth devices to obtain customer data—this is increasingly more popular because skimmers don't have to risk returning to the crime scene to capture the data.

All types of ATMs are under attack by skimmers, who especially favor unattended machines in public locations like airports, kiosks or convenience stores.

How can credit unions fight back against ATM skimming attacks?

“Make sure a fraud management system is in place that monitors all PIN transactions,” says Ann D. Davidson, risk-management expert for CUNA Mutual Group in Madison, Wisconsin. “Set reasonable daily dollar limits for PIN authorizations when the system is available, and also when it's not available. Confirm you are validating the CV counterfeit protection encoded on the magnetic stripe for PIN authorizations. Also be sure you are utilizing exact expiration date matching.” 

Be proactive in educating customers about skimming—instruct them to examine ATMs before inserting their cards and to carry out ATM transactions during daylight hours when possible, because most ATM-related crimes occur after dark.

Reprinted with permission from Card Services for Credit Unions.