ATM Fraud Gets Even More Brazen

ATM Fraud Gets Even More Brazen
Wall Street Journal (11/20/10) Blumenthal, Karen

Identity theft and debit-card fraud continues to rise as criminals increasingly target banks' automated teller machines to "skim" card information and personal-identification numbers. In previous years, most fraud occurred at independent ATMs or at retail points of sale, but in the first six months of 2010, fraud at bank-owned ATMs made up more than 80 percent of the breaches, according to fraud-detection software provider Fair Isaac. Attacks on retailers are also on the rise, with card numbers, cardholder names, and PINs being skimmed from payment terminals. Avivah Litan, fraud analyst at research firm Gartner, estimates that fraud involving debit cards, PINs, and point-of-sale equipment has risen 400 percent in the past five years. One tactic is a "flash attack," in which gangs use stolen information to create counterfeit debit cards. The gangs then dispatch cronies to hundreds of ATMs in several cities at once, each withdrawing a small dollar amount that adds up to tens of thousands in losses. Some skimming devices are able to fit inside ATM card readers, and small pinhead-sized cameras record hands punching PINs, looking like legitimate security equipment. Most consumers and even banks cannot tell that a machine has been compromised. Perpetrators often place skimmers on outdoor ATMs on Saturday mornings and remove them by Monday morning, passing on the stolen data within hours. Some countries have adopted so-called chip-and-PIN debit cards that have an added layer of protection, but U.S. banks and retailers are hesitant to adopt the technology because of the expense involved.