It's very convenient. You insert your bank card at an automatic teller machine and out come crisp dollar bills from your account. What you may not know is that at the same time, criminals may also be accessing your account.
It is one of the fastest-growing forms of bank fraud in the country. Last year, $2 billion was stolen from bank accounts when they were "skimmed" at an ATM.
At the financial crimes lab of the U.S. Secret Service, agents analyze the devices used to steal names and account numbers from a bank card's magnetic stripe — some small enough to fit in the palm of your hand.
"Anything that is equipped with a card reader is potentially subject to compromise," said Jim Savage, director of financial fraud for the Secret Service.
The information stored on these "skimming" devices can be downloaded onto the Internet and used to make counterfeit cards in a matter of hours — and you have no idea it happened.
But the "skimming" fraud that has the Secret Service most concerned right now involves ATMs — especially stand-alone ATMs — that millions of people use in their local convenience stores. Investigators say criminals favor these ATMs because there are often no surveillance cameras watching them.
Eric Wolfman, 28, a vice president in the mergers and acquisitions group of Solomon Smith Barney, used these ATMs until he discovered someone had stolen $1,200 from his bank account.
"I was kind of shocked at how somebody could pull something like this off," he said. "I mean, I've been using my debit card for years."
Difficult to Detect
ATM fraud is difficult to detect. As is the case with so many victims, the machine gave Wolfman his money and his card back while it was stealing his account information and personal information number, which thieves later used to drain his account.
Now, "I'm just trying to stick with the larger banks and trying to stay away from the mini-ATMs as much as possible," said Wolfman.
One reason the crime is growing is because anyone can buy an ATM. You can even buy one on eBay — mini-ATMs can go for as little as $250, full-size models cost about $4,000.
With help from the Secret Service, local law enforcement is catching up. Prosecutors are getting ready to try a ring of suspected thieves who allegedly netted $3.4 million from frauds involving ATMs in Florida, New York and California.
It's the banks that lose money on these crimes. Consumers get paid back because their bank deposits are insured by the federal government. But anyone who's been through this will tell you it's a disturbing violation. And if it ends up costing your bank money, it's a good bet the bank will pass the cost on to you.