ATMs are ubiquitous and their presence across city corners, gas stations and grocery stores make them a regular part of our financial routines. However, ATM fraud is on the rise, with increasingly sophisticated methods targeting unsuspecting cardholders.
ATM fraud includes techniques ranging from card skimming to card and cash trapping, and even physical robberies at machines. In 2023, FICO reported a 109% year-over-year increase in bank ATM skimming, underscoring the growing threat.
However, there are preventive measures to safeguard yourself. Ryan Hatch, TransFund fraud risk manager, suggests keeping the following three factors in mind in regard to ATM fraud prevention: the machine, the card holder and the account.
The machine: follow the S.A.F.E. protocol
It’s important to note that fraud can take many forms, including some of the most prevalent, which include cash trapping and skimming.
Cash trapping is a technique where fraudsters obstruct the cash dispenser to retain the money. This type of fraud involves placing a device in an ATM that blocks the issue of money, causing the cardholder to believe the ATM is malfunctioning when the cash does not appear. If you encounter an issue such as the ATM failing to dispense cash, it's important to call the number displayed on the machine, Hatch said.
Skimming and shimming, on the other hand, involves a compact device installed over or into the card reading slot to capture data from your card's magnetic stripe and chip. Indicators of these include multiple card insertions before successful operation, the card barely fitting, not a smooth insertion or being difficult to remove. "If your card faces resistance, don’t use that ATM," Hatch said. “There will be visible signs that something is amiss.”
When assessing a machine, Hatch advises users to:
- Select ATMs in well-lit high traffic areas and stay clear of machines with graffiti, dirt and grime. Seek out ATMs which your bank or credit union issuer provides surcharge free.
- Always shield your PIN while entering and inspect the ATM for loose parts near the card reader or skimmers. Alert store security or personnel if you see something suspicious.
- Focus on your surroundings and avoid accepting assistance from strangers. Fraudsters use this as an opportunity to distract you.
- Enable transaction alerts so you are notified of all transactions made on your card and ensure your card is always in your possession.
The cardholder: stay situationally aware
For the cardholder, the key is to be aware. “Often, we see people go into autopilot. They are going through the routine motions and not really paying attention to their surroundings when attempting to access their money at an ATM,” said Hatch.
Hatch also suggests you ensure your PIN entries remain confidential and avoid counting cash at the ATM.
“Try to be as prepared as possible,” Chad Davisson, an ATM technical services manager for TransFund, added. “Put your phone away and have your card out, ready to go when you approach the ATM, so you spend as little time at the machine as possible.”
And if you witness something suspicious with an ATM, don’t try to fix it yourself, he warned. “Notify the store owner if it’s in a store, and contact the number posted on the machine so the ATM vendor can remedy the situation.”
The account: regularly monitor activity
Lastly, regularly monitor your account activities. This will help you promptly identify any abnormalities. “If you think you might have been scammed, don’t hesitate to call your bank or credit union,” said Hatch.
Early detection of fraudulent activities is critical in mitigating potential losses and resolving any issue promptly.
The bottom line: stay vigilant and report
Preventing ATM fraud hinges on vigilance and awareness. If you notice an anomaly, report it. "If people report abnormal machine behavior or transactions, we can address the problem immediately," Hatch said.
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