ATM fraud poised for increase

Studies conducted by US risk management bodies point out that ATM debit card fraud is an ever-growing trend in the current economic climate, particularly since fraud detection software has improved credit card security and debit cards are currently seen as more readily available by fraudsters. To that effect, experts expect ATM skimming – which consists of installing a hidden device inside the machine itself to read and store all personal data which are then transferred onto cloned debit cards – to increase in the coming interval.

In the US, debit card fraud is made even more of a risk due to US federal regulations which limit cardholders’ liability for credit card fraud to UDS 50, while the same limit only applies to debit card frauds which are reported within 48 hours. Moreover, debit card fraud empties the victims’ checking accounts, causing a spiral of troubles such as missed payments and rejected checks.

The study in question points out that while ATM fraud is increasing and ATM fraud schemes are getting more creative, there is a positive consequence of the increase in ATM debit fraud, namely that banks are incurring growing losses as a result and are stepping up their ATM-safety measures. In other words, the banks’ previous outlook regarding debit card fraud as an acceptable business loss is changing, and a number of solutions are being put into place to increase debit cardholders’ protection. Among the measures mentioned by information-technology research and advisory company Gartner, which conducted the study, are replacing ATM PIN keypads with dialing devices or programming ATMs to react when they are being tampered with and automatically shut down.