Card skimming is the practice of installing "skimmers," or clandestine card readers, into ATMs. Card skimmers read your card number at the same time as the ATM. Combined with a pinhole camera that allows your PIN to be identified as you type it in, these systems allow criminals to steal your debit card information, create a fake card, and empty your account.
Worse still, losses are only capped if they are reported to the bank quickly. According to federal law, losses are capped at $50 if reported within two days and $500 if reported within sixty days when your card is lost or stolen. The same rules apply with a fraudulent card, but some banks can balk at replacing the cash since you cannot always prove that the use was fraudulent.
Skimming attacks are on the rise, according to FICO. ATM skimming on bank property has increased by 174 percent over the previous year and by 315 percent for ATMs outside of bank property, costing banks and customers an estimated $3 billion.
Card skimming technology has drastically improved over recent years, evolving into undetectable skimmers that fit inside the card slot. Crude faceplate skimmers still exist, but sophisticated skimmers are now readily available as completed assemblies. For an investment of a few thousand dollars, a criminal can be in the card-skimming business in no time.
How can you protect your card from being skimmed and your account from being drained? There are a few relatively simple steps you can take.
- Use ATMs Strategically - The new devices may be sophisticated, but it still takes time for crooks to install them. It is best to use ATMs that are in full public view as much as possible, preferably with nearby video monitoring to guard against skimming tactics. ATMs on bank properties are generally safer, but even there the ATM may be off in a corner or a low-traffic area. Choose the ATM with the greatest collective visibility.
If you use the same ATM regularly, you may be able to notice any changes in the appearance such as holes, new decals, or a slightly different looking surface on the PIN pad. If you suspect anything, notify the bank and use a different ATM or make your transactions through bank tellers in the interim.
- Protect Your PIN - PIN protection is the key. A skimmer can discreetly get your card number, but they cannot get your PIN without some recording or observation method as you type it in. Covering the PIN pad with your hand as you type is the simplest method of protection. It may not be convenient, especially if you are using a drive-through ATM, but it is the best protection you have available. However, some sophisticated PIN overlays exist that can lift your data as you type.
- Check Your Account Regularly - A simple online balance check at the end of the day can help limit the damage in case of fraud. If your bank offers the service, consider having an account activity alert put in place to flag unusual activity. You may be contacted to verify a purchase at point of sale or have to notify the bank of larger purchases in advance, but the inconvenience may be worth the increased security.
Choose ATMs wisely, assess them for any signs of tampering and shield the PIN pad as you type your number. Those steps do not guarantee that your debit card information won't be compromised, but you can make it as difficult as possible for criminals. They are likely to move on to an easier target.