How Do You Stop an ATM Skimmer?

PHOTO: A bank customer swipes his card sideways.
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We’ve all heard the alarming stories of thefts stealing credit and debit card information via ATM “skimming” or the installation of phony card readers that read the data off of a card’s magnetic stripe.

An online image search of ATM skimmers turns up devices that could easily pass for the real thing and are installed directly over existing card readers, blending in with the rest the ATM.

Unsuspecting customers swipe their card through the bogus card reader and the data is captured.

Diebold, a major manufacturer of ATMs and financial security systems, has recently introduced a new type of card reader that turns the process on its head. ActivEdge requires users to insert their card sideways, via the longer edge. In doing so, only the ActivEdge card reader has full access to the card’s magnetic stripe.

“What we’ve done is turn the card 90 degrees, so that when it’s taken into the card reader. It is not being taken in in the direction that allows the magnetic stripe to be read,” said Frank Natoli, executive VP and Chief Innovation Officer at Diebold.

In a traditional card reader, once a card is inserted, a separate, magnetic read head scans and captures the data off of the card’s magnetic stripe. The read head is placed so that it reads the magnetic stripe at the same time the card is being inserted into the card slot.

With ActivEdge, Diebold has separated the two steps of the card-reading process. First, by having users turn the card sideways, and secondly by reading the magnetic stripe information from that position.

"Instead of moving the card over the read head, once it’s inside the card reader, we take the read head and move it across the stripe at 90 degrees,” said Natoli.

Natoli added, “Between that and a gate that we have in front of it, there’s no way to create enough travel of the card itself in the proper direction, for a traditional skimmer to work."

Diebold has been pilot testing ActivEdge internally at the company’s own credit union for the past three months and is currently in talks with its existing customers to rollout the device. The card reader is available for newer Diebold ATMs, and can also be retrofitted to current Diebold ATMs.

In a statement, Andy Mattes, Diebold president and chief executive officer said, "Card fraud at the ATM is a serious and prevalent crime that leads to significant losses. ActivEdge will be a game changer in our industry's fight to protect consumer data."

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