How thieves set up ATM skimmers

ATM scams are an unfortunate reality in today's world. As the use of these automated machines grew to become a primary method to access cash, scammers, not to miss a beat, created lucrative ways to exploit these machines with the intent to rip people off. As with any convenience, there is typically a trade-off and, with ATMs, one of the biggest risks these days are devices called skimmers.

Image credit: Leigh Goessl

What are ATM skimmers?

ATM skimmers are small devices which contain a magnetic head that captures data. The device is typically either placed on top of or inside of an automated teller machine. It's often used in conjunction with a small camera. Sometimes a skimmer is very easy to detect, but other times is designed very cleverly. Several years ago Bankrate referred to it as becoming a "high-tech art that's hard to detect." And things have come a long way since that time.

How thieves set up ATM skimmers

Unfortunately, as technology progresses, skimmers have become more sophisticated in nature and, as a result, harder to detect. Earlier skimmers were clunky easily spotted, but modern ones are smaller and may blend right in with the ATM or inserted inside.

Wireless technology is often a tool used to carry out the ATM fraud as scammers can then capture the data without even having to return to the proverbial scene of the crime; all data is sent back to the thief via a text message, as Krebs on Security notes. Often the skimmer looks just like a piece of the standard equipment and the user may not realize tinkering has been done until after they slide their card. A tell-tale sign is an error message shown on the ATM's screen instead of the transaction being processed.

As noted above, skimmers are often used in conjunction with a camera and/or mirror, so the thief not only nabs the data stored on the card, but also often successfully steals the PIN number, giving the scammer full access to the victim's bank accounts. Once this is done, the stolen data is then generally used for illicit purposes, mainly theft. Newer scams include adding keypad overlays which capture PINs as the user types them in on the actual keyboard, not knowing a device has been placed on top of it to mimic the real keypad.

Thieves are getting crafty about skimming, often placing a skimmer on a machine over the weekend when people are shopping and banks are closed down until Monday morning. By the time anything amiss is noticed, the thieves are long gone.

Avoid becoming a victim

ATM users can increase the security of their accounts when using automated cash access. Before sliding the card in, look to see if the card slot is loose, or protrudes more than usual, if so, this could mean the machine has been compromised. It is also a good idea to always:

• Remain aware of your surroundings
• Become familiarized with the machine(s) you use as it will be easier to detect if anything is amiss
• Always cover your hand as you type in your PIN so any hidden cameras or mirrors don't capture it
• Jiggle the card slot a bit, if it moves, this is a huge red flag
• Don't use ATMs in dark or isolated areas
• Try and use the same ATMs on a routine basis
• Limit ATM visits, the more you use them, the higher the risk of compromise
• Prepare your paperwork away from the ATM

Fraud involving ATMs is on the rise. ATM scams are a billion dollar illegal business, the U.S. Federal Bureau of Investigation (FBI) estimates consumers lose $1 billion a year to skimmers.

Thieves are also getting extremely sophisticated, even finding ways to hack machines without using malware. Another tactic used is installing devices on the door scanners of banks that allow access to ATMs. It used to be primarily populated areas were targeted, but past trends indicate small towns are being victimized by scammers as well. ATM fraud does not discriminate and anyone can be affected. This has become an issue in countries across the globe.

Understanding what ATM skimmers are and how they work can increase your own personal security and protect your bank accounts from theft. Keep in mind, the holiday season is also the season for scams of many kinds.