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Surprise! You’ve Been Skimmed

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Have you ever looked at your checking account activity and identified transactions on your debit card that you do not recognize? The typical first reaction is to confirm if the debit card is missing from your wallet or purse.

Next, people often mentally retrace their steps, trying to figure out where they used the card and who could have had access to it. Was it at the grocery store or maybe an online purchase made?

One of the last-considered options regarding how your card information was stolen is the least obvious because it was directly in front of you… just hidden. Covertly placed on the ATM or point-of-sale (POS) terminal you used to get cash, pay for gasoline, or complete a purchase through self-checkout could have been a skimmer.

What’s a Skimmer?

A skimmer is a piece of equipment built by fraudsters – typically a combination of plastic housing and electronic circuitry – that is intended to be illegally attached to an ATM or POS in a way that is not easily detectible by users. Information is read – such as the personal identification number (PIN) – from the magnetic stripe on the card and/or captured by camera for later retrieval by the fraudsters who planted the device. Skimmers are surreptitious by nature, which means they don’t interfere with the normal functions of the ATM or card reader, making detection difficult.

Once a fraudster retrieves a skimmer, they will generally transfer information onto a homemade card and then use the corresponding PIN to carry out transactions. This effectively creates a duplicate of your card without ever taking possession of it.

The Federal Deposit Insurance Corporation (FDIC) notes four categories of skimmers:

  1. Card Reader Overlay – a piece of plastic that fits over the slot where a card is inserted, which reads and stores data from a card that is inserted
  2. Hidden Camera – a tiny camera hidden near or inside an ATM which is aimed at the keypad to capture a PIN
  3. PIN-Capture Overlay – dummy keypads replacing an ATM’s real keypad to record a PIN
  4. Fake ATM Faceplates – an altered ATM cover that contains cameras or PIN-capture overlay

Identifying Warning Signs of Skimmers

Before inserting a card into an ATM/POS, carry out the following steps to protect yourself:

  • Inspect security tape or stickers on the ATM/POS, since broken seals may indicate tampering.
  • Touch the surface around an ATM/POS. Raised or uneven surfaces may be a cause for concern.
  • Install a skimmer-detecting application on your phone, which may be able to identify Bluetooth devices often used with skimmers.
  • Grab the card reader and wiggle it – if the device is loose, do not begin a transaction at that machine.
  • Compare the physical look of the ATM/POS next to the one you are using and make sure these look exactly the same, since extra parts, different color stickers or obscured graphics on the device you are about to use could be warning signs.
  • Inspect the face of the ATM/POS for traces of glue, unusual plastic fittings, open wires or loose fittings and misaligned fixtures.

Reducing Risks of Skimmer Abuse

The Federal Bureau of Investigation (FBI) recommends considering the following practices when using an ATM or POS:

  • Use a free hand to cover the keypad while typing in a PIN.
  • Choose ATMs located indoors whenever practical, as well-lit positions provide fewer options for installing skimmers.
  • Look for skimming devices around popular targets such as tourist locations or heavily trafficked areas such as airports.
  • Use cards with chip technology, as there are very few devices (known as shimmers) that can steal that data.
  • Monitor accounts and bank statements each month and review your credit report at least once a year, looking for transactions and accounts you do not recognize.
  • Sign up for account alerts through online and mobile banking to monitor transaction activity.
  • In addition, consider the following:
    • For POS devices, use tap-to-pay or electronic wallets wherever possible as a way to avoid inserting a card into an unknown device.
    • Utilize online banking option to check balances, transfer funds or pay bills instead of going to an ATM.

Responding to Potential Skimmer Attacks

If a review of your bank statements or account alert received makes you believe that you’ve fallen victim to a skimmer scheme, make sure you do the following:

  • Immediately contact the financial institution that owns the ATM that does not return a card after a transaction is ended or canceled.
  • Inform personnel at the gas station, retail establishment or financial institution where you believe a skimmer is attached.
  • If you confirm purchases have been made or cashed withdrawn without your knowledge, file a Reg E Dispute with the financial institution that issued the card. You will need a new card and probably an account change.
  • File a police report with local law enforcement.

It is estimated that consumers and financial institutions lose more than $1 billion annually due to skimmer fraud. Such schemes are not going away, as fraudsters continue to advance in their technical knowledge of how to make skimmers.

Stay safe in how you use your debit card by being very observant of ATM/ POS machines before you carry out transactions through them.