Thieves are retrieving debit card data at U.S. automated teller machines (ATMs) at the highest rate in 20 years, both at machines owned by banks and those operated independently at stores, eateries and shopping centers.
While most of the publicity over the past two years has centered on massive hacks at retailers via checkout counter vulnerabilities, consumers may not realize the scope of ATM incidents, in which thieves steal information from debit cards to make counterfeit cards or sell the data through black market websites. The theft can result in the draining of a debit card user’s bank account.
According to FICO, the firm that formulates the most widely used credit scoring models, the number of attacks on debit cards used at ATMs, from January to April 9, 2015, reached the highest level for that period in at least two decades. FICO tracks ATM thefts through its card- monitoring service for financial institutions that represent more than 65 percent of all U.S. debit cards.
Debit-card thefts at ATMs located on bank properties surged 174 percent from Jan. 1 to April 9, compared with the same period last year. Meanwhile, attacks against nonbank machines soared by 317 percent, FICO said.
“These tremendous spikes in fraud are unprecedented,” said John Buzzard, who manages FICO’s card-alert service. FICO declined to disclose to the Wall Street Journal the total number of such incidents, citing contractual restrictions with its customers.
ATMs at banks and other locations where you swipe a card — including the gas pumps — have long been targets of scammers who install skimming devices that collect the information on a card as it’s inserted. More sophisticated skimmers also employ cameras and other technology to collect information that’s not stored on the card, such a user’s PIN.
The rate of ATM thefts are surging just as banks are scrambling to issue new credit and debit cards with computer chips that make it more difficult for thieves to create counterfeits. However, most ATMs don’t yet accept the new technology — though J.P. Morgan Chase and Bank of America have recently begun to install more advanced machines.