ATM Skimming 101: How to Keep Safe

ATM Skimming 101: How to Keep Safe

Sean Seibel thought it looked just like any other ATM -- at least at first.

Earlier this month, the 33-year-old Microsoft employee, who lives in New York City, stopped in the closest Chase bank to get some cash to pay his barber. But when he inserted his ATM (automatic teller machine) card in the machine, he noticed a bit of resistance.

The screen said the machine was unable to read his card. So he tried again. But a second time, the machine gave him an error message.

He was about to give up and try another machine, when a thought popped into his head. He had heard about devices that fraudsters attach to the outside of card readers on ATM machines and, though it seemed unlikely, wondered if that was the source of his problem.

"I'm looking at the thing and thinking this can't be – no way," he said. "There are all these stories and myths about it, but I actually found one in the wild."

With a combination of fear and exhilaration, he tried to pull on the green plastic surrounding the card slot and found that it peeled right off.

"I'm like WOW," he said. "My heart's beating fast but I'm also now freaked out."

Behind an extra mirror attached to the machine, he also found a hidden camera positioned right over the key pad, to capture the PIN codes as victims type them in.

He notified the branch manager who contacted bank security and later shut down the machine and alerted other area banks.

Three Skimmers Found in One Week

But that same week Nick McGlynn, a 26-year-old photographer, also spotted an ATM skimmer at a different Chase bank in New York City. He had just read about Seibel's experience on a technology blog, when he walked by a set of Chase ATMs that looked peculiar.

"From the window, I could see a mirror centered on one ATM but no mirror on another," he said.

A woman was using the machine, but he politely asked her if he could check on something. When he pulled at the mirror, it came right off and, like Seibel, he found a hidden camera behind it.

According to the blog the Consumerist, in one week, three of its readers -- Seibel, McGlynn and another man in Los Angeles -- each found a different ATM skimmer, raising questions about the frequency of this supposedly rare kind of crime.

And though experts say hard data on the phenomenon is difficult to come by (banks are wary of reporting incidents for fear of alarming customers), some think changes in the industry are making bank ATMs in the United States increasingly vulnerable.

Losses From Skimming Total $1 Billion a Year

"ATM skimming has been and will continue to be the number one type of ATM-related fraud," said Tracy Kitten, editor of ATMMarketplace.com. "It's something that the industry has been fighting for a very long time."

The fraud involves accessing bank accounts by capturing the data off customers' bank cards. Criminals attach skimming devices over the card slots on ATMs to steal the information as the machine reads the card's magnetic strip.

Hidden cameras -- like those recently found behind extra mirrors -- record victims typing in their PIN codes. More sophisticated criminals use wireless keypad overlays, that transmit a person's PIN to a nearby laptop, instead of the cameras.

Once criminals have that information, they can send it to others who can make illicit transactions anywhere in the world.

The U.S. Secret Service estimates that annual losses from ATM skimming total about $1 billion each year, or $350,000 a day.

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