4 steps credit unions can take to minimize ATM fraud impact
The migration to EMV, sparked by the liability shift instituted by Visa and MasterCard, was primarily about upgrading terminals at the point-of-sale (POS), as well as re-issuing credit and debit cards to combat counterfeit cards being used to make purchases at brick and mortar stores. It was widely expected that fraudsters would not go away and that fraud would materialize in other forms; primarily online or card-not-present fraud. But leave it up to the fraudsters to stay one step ahead of the good guys with an increase in fraud at ATMs.
ATMs, being always connected to an authorization network, and requiring PIN for any transaction, has historically been an environment where fraud was rarely seen. As fraudsters become more sophisticated, and chip card usage at the POS is growing, skimming mag stripes together with capturing the PIN entry using a tiny camera, has led to an alarming increase in ATM fraud rates. The number of ATMs in the US compromised by criminals rose 546 percent in 2015 over 2014. And whereas skimming previously was predominant at 3rd-party-owned ATMs such as those found in 7-Elevens (in 2014 3rd-party ATMs were 10 times more likely to have a skimmer than a bank-owned ATM), overwhelmingly, bank-owned ATMs have become the most popular location for a criminal to set up a card skim operation because it affords the ultimate opportunity to capture a member’s card account and PIN number.
At the same time, fraudsters are becoming more elusive. According to FICO, fraudsters today favor rapid deployment and removal of skimming equipment resulting in a micro burst of fraudulent activity. By doing this, they capture a steady but smaller stream of mag stripe cards which are then sold in the black market. This plan of attack has been quite successful for fraudsters.continue reading »