ATM Crime Grows, Thanks to Skimming and Organized Crime

According to a report released earlier this month by Javelin Strategy & Research on ATM and Personal Identification Number fraud, 10 percent of fraud victims in the U.S. experience fraudulent ATM cash withdrawals. As a result, 23 percent of the 4,874 consumers interviewed for the survey said they left their primary financial institution. Research analysts said that in addition to the use of skimming devices, thieves are now gaining access to customers PINs by manipulating ATM software and by sending out bogus text messages to consumers requesting their personal information. “Despite the efforts by financial institutions to protect consumers, the number of records breached rose 16 percent in 2009,” the managing partner and research director for Javelin said in a prepared statement. “Fraudsters have become more organized globally and more sophisticated technologically and may increase their attacks on ATMs in the U.S. as neighboring countries such as Canada and Mexico move to EMV chip-cards, which protect against skimming.” Analysts are advising financial firms to not only implement more layered security measures, but to also educate users on fraud risks and how to avoid them.

In one crime example, two Romanian nationals are in federal custody for allegedly using card skimmers in Pittsburgh to steal the account numbers from PNC Bank card users and then using those accounts to spend some $200,000. The suspects are charged with bank fraud, access-device fraud and aggravated identity theft. The Western Pennsylvania Financial Crimes Task Force received information from PNC Bank that in January, investigators learned that more than $200,000 in fraudulent credit- and debit-card purchases had been made in New York City and Washington, D.C. The investigators were able to trace the compromised accounts to ATMs in Pittsburgh, according to a criminal complaint filed in the case. Video surveillance at the ATMs showed two white men installing what is known as a skimmer onto the machine. The skimmer, which goes undetected by customers, collects account information from the magnetic strip on debit and credit cards. The suspects installed the skimmer about five times, including twice at PNC’s branch in Shaler Plaza on Route 8. Agents did surveillance at that location April 15, and at 5 p.m., they saw men matching the surveillance photographs approach the ATM, the complaint said. As a detective approached them, both men walked away in different directions. Both men, who had Romanian passports and American visas, waived their detention hearings and are in custody.