Criminals have made off with as much as $3 billion worldwide using devices that skim important information from credit and debit cards. That’s according to makers of ATMs and other payment equipment. The use of skimmers at ATMs exploded more than fivefold last year than the year before.
Mary Marichak had no idea crucial financial information was copied from her debit card when she swiped it at an ATM recently. The first sign of trouble -- her debit card was rejected when she tried to pay for gas.
“So I ran home to check my account and realized that money was missing from my account and then the lightbulb went off that something weird had happened,” Marichak explained.
A police detective showed us the hardware thieves install surreptitiously at ATMs --- a skimmer to copy the card information and a tiny camera to record you typing in your PIN number.
“Most commonly the criminals remove the devices and then use the information to create a duplicate debit card that they can then use to drain your account” explained Nikhil Hutheesing with Consumer Reports.
Covering the PIN pad as you type is one way to thwart this scheme. But now there’s a new type of skimming device that doesn’t use a camera at all. It’s a fake card reader that fits snugly over the real one you often find in stores. First it reads your card information and then -- when you type in your PIN.
“The PIN number is extracted and stored in the PIN pad overlay,” explained Detective James Lilla who works with the Financial Crimes Task Force in New York.
“This type of point-of-sale skimmer is usually attached with double-sided tape. So if you can tug it loose, don’t use it. And be sure to report it to store management,” Hutheesing added.
A tangle of elastic bands is another type of skimmer but you wouldn’t be able to spot it as it is placed deep inside a gas pump.
Increasingly, ATMs are also being compromised by devices called deep-insert skimmers – that can’t be detected from the outside but that steal your information just the same.
“The bad guys will insert a skimmer way deep into the mouth of the ATM, so as a customer you will never see it,” explained Lilla.
Chip cards with their improved security features are safer to use but only if just the chip end is inserted into the card reader.
Since you can't always detect a skimmer, Consumer Reports says there are a few other things you can do to reduce your risk.
- Avoid remote ATMS and point of sale terminals. This include places that are poorly lit or in low-traffic areas.
- At gas pumps, don't insert your cards into the readers. Instead, you can go inside and pay the attendant directly.
- Use a credit card instead of a debit card, when you can. With a debit card, there's a risk of thieves quickly draining your account.
- Constantly monitor your bank accounts online for suspicious activity. Report any concerns to your bank or credit union's fraud department immediately. The law limits the time you have to report unauthorized transactions before your liability begins to increase.