Automated Teller Machines aka ATMs have become one of the most convenient and efficient ways for people across the globe, to obtain cash currency. There are now ATM machines in almost every country on earth, including one in Antarctica. ATM machines usually accept all major credit and debit cards and some even offer cash in multiple currencies, but usually at an exchange rate highly favorable to them.
However, use of ATM machines is not without risk. ATM Scams have increased significantly over the past few years and have become much more sophisticated; incorporating technologies to record customer banking information, including credit and debit card PIN numbers.
In order to avoid being victimized, ATM users should be aware of the various different types of Scams and thefts that can occur; card-reading devices/ skimming, card and cash trapping devices, distraction techniques, the Lebenese Loop, etc. Read below for more.....
Popular ATM Scams and How To Avoid Them.
Fake PIN pads? Skimmers? hidden cameras? Cash trapping? ATM theft is getting more sophisticated everyday. Often people don't even realize that they've been victimized by an ATM Scam until it's too late. Would you know how to recognize and protect yourself from these popular ATM scams? If not, today you'll find out how.
Plus, we'll answer the most common question we hear about ATM machines: Does entering your PIN number backwards really summon the police?
First, let check out today's...
6 Clever ATM Scams and How To Avoid Them
With more than 1.6 million ATM machines around the world, most of us simply take our ATM cards for granted. Unfortunately, thieves know this and use it to their advantage -- so ATM theft is becomming a big problem.
In fact, as ATM banking technology advances, so too do the thieves. They have become so clever in their scams that you most likely won't see them coming or even realize until it's too late. The good news is that there are several easy ways to protect yourself from these new ATM scams.
In this Scam revealing website, we highlight the worlds most popular ATM scams and ATM Fraud currently being used. We will also offer advice and tips on recognizing and avoiding these ATM scams.
But first, we'll answer the most common question we hear about ATM machines: Does entering your PIN number in reverse really summon the police?
The answer is NO. We started hearing about this last July and, Although this concept seems like a good idea, (and a similar system was designed to notify the police by a Chicago businessman) no such system has been implemented.
The banking industry is not interested in the technology because of the cost and difficulty in implementing it. They are also skeptical as to weather it would actually work. Imagine trying to remember you PIN number backwards with a thief holding a gun to your head. ;-)
So, until this system is implemented, (which is doubtful) entering your ATM card pin number backwards will do nothing..
See the answers to our other Frequently Asked Questions Here: FAQ
The 6 most Commonly used ATM Scams
1. The Lebanese Loop
Many thieves are now using external devices to confiscate your card. In this scam, a blocking device (which can be as simple as some paper & tape), is inserted into the card slot of the ATM machine in order to trap ATM cards. Unwittingly, a customer would place their card into the ATM machine and enter their PIN. All the while, someone nearby may be watching you enter your PIN number.
A very common reaction is to go into the bank to report your confiscated card. This is when the thieves jump into action. They remove the blocking device, along with your trapped ATM card and withdraw money from your account.
Although, the way the scammers use the Lebanese Loop often varies. Once your ATM card is trapped, a "Good Samaritan" might show up and offer advice on how to get your card back. They may even suggest that you enter your PIN number a couple of times.
They might also offer to hold the cancel button while you enter your PIN. But what they're really doing is memorizing your PIN number. They're certainly not Samaritans at all!
Newer ATM scams have even seen techniques where Lebanese Loop scammers install mini spy cameras atop of ATM machines, in order to copy ATM consumers Pin numbers without approaching them. (Read more about this in section 3: Shoulder Surfing)
Read our detailed article about the Lebanese Loop scam, here.
2. Card Skimming
Skimmers are devices designed to steal credit card and debit card details. They work by reading and copying the private banking information stored in the magnetic stripe on the back of all ATM bank cards. In ATM Scams, Skimmers are always attached or put inside the credit card slot, in order to read and copy your card's information as it is entered; copying your account number, account balance and PIN number. These devices, are also found mounted alongside ATM machines labeled as 'card cleaners,'. They are usually difficult to notice, unless you're looking for them.
You may also find card skimmers mounted beside the normal ATM card slot with a sign that says, "slide card here first." Sometimes they are even mounted right on top of where you would normally enter your card. Skimmers can collect and store data of up to 200 ATM cards before they need to be removed by thieves. So you won't always see the thief standing nearby when you are scammed at an ATM machine.
Read more about Card Skimming Here.
3. Shoulder Surfing, Fake PIN Pads, and Even ATM Fake Machines
Another method that thieves use to steal ATM PIN numbers is to mount a wireless video camera inside the ATM area. It can look as harmless as a brochure holder. Once the scammers have the victims PIN number, they either use the information in connection with a card skimmer, to replicate the stolen ATM card. Or they follow the victim and physically steal the credit or debit card and then go straight to an ATM before the card is cancelled and police notified.
In addition to using spy cameras to collect PIN numbers, thieves have designed fake PIN pads that they place on top of the original ATM PIN pad. Unfortunately, with fake PIN pads, your ATM transaction will proceed normally and you won't know a scammer has stolen anything until it's too late.
ATM Scammers have also taken to occasionally putting up fake ATM machines in and around shopping centers and other public locations. Upon placing your card into the card reader, these machines collect your ATM PIN and account information. They do not dispense cash. Rather, a screen comes up that says that the machine is out of money or out of order.
Read more Here.
4. Cash Trapping.
Cash Trapping is similar to the Lebanese Loop, where a thin sleeve traps your ATM card. But in this scam it's your cash that is trapped by a device that is slipped inside the ATMs cash dispenser. Your transaction will operate normally, but you won't receive the cash you've withdrawn.
Chances are you'll either walk or drive away assuming the machine is out of order or you'll go inside the bank and report the incident. Either way, you have left the machine and the thieves can walk up, remove the device, and your cash.
Read more about the Cash Trapping scam here.
We mentioned above how easy it is for thieves to replicate ATM cards. All they need is a magnetic strip and a plastic card. Armed with an ATM card, all a would-be thief needs is a PIN number. Some email phishing scams have been designed to find out just that.
Representing your bank, a scammer can send you an email with a notice on it saying something about incomplete account information or that you need to update your account information. You click on the link and follow the directions but you're not at your bank, you're at a site designed to look like your bank by thieves. They collect your information and are free to replicate your ATM card or simply withdraw your money from your account via online banking.
Read more about Phishing Here
6. Distraction Technique
Distraction techniques do not rely on tampering with ATM machines themselves; instead, they involve interrupting you while you are withdrawing funds from an ATM. Typically, there are two perpetrators, one who distracts you after you have entered your card and PIN number, and another who grabs your money. The distractor may pretend to sell or give you a newspaper; place a $5 note at your feet and tell you that you dropped some money; ask you for a charitable donation; or whisper in your ear. Sometimes the distractors are children. The common element in all these ruses is that they occur after you have entered your ATM card and PIN number and are no longer protected by the bank's security measures.
8 Tips to Help You Protect Yourself From ATM scams:
- Get in the habit of using the same ATM machines for your transactions. Become familiar with them and try to be able to recognize any changes to the machine.
- Use ATM machines inside banks rather than on the street (where they're easier for thieves to access).
- If you're visiting an unfamiliar ATM machine that is not inside a bank, examine it carefully for devices. Card or cash trapping devices need to be glued or taped to the card reader or cash dispenser. Look for 'extra' cameras beyond the basic and generally obvious ATM security camera.
- Never rely on the help of strangers to retrieve a confiscated card.
- Never use an ATM machine when other people are lingering.
- Report confiscated cards immediately. If you can, don't leave the machine. Instead call the bank from the ATM where your card was taken using a cell phone.
- Don't use ATM machines with extra signage or warnings posted on the machine.
- Never follow a link in a supposed bank email notice. If you are wondering if your bank has really contacted you via email, then close the email and directly type your bank's website address into your browser. Visit your account and look for update notices directly on your account or bank's website. The email is almost always a phishing scam.
While ATM theft isn't going to go away, the Global ATM Security Alliance reports that just .0016% of all ATM transactions worldwide are affected by crime or fraud. Additionally, with a little bit of care and attention, you can avoid these scams and keep your money.
For more information on how to keep your bank account safe from predators, Read our Fraud prevention article.