Before you put your money in an ATM, make sure it's really an ATM

ATM theftA ski mask, a gun and a getaway car -- used to be, that's all you needed to pull off a bank robbery. But nowadays, that's so old school.

In what's becoming an increasingly common practice, if you're planning to rob a bank, an ATM skimmer is the way to go. And as terrible as it is for customers, it's quite an improvement over the old methods.
A skimmer is a small device that identity thieves have been increasingly placing on ATMs in order to gain ID information and access to people's accounts. And it's a nationwide problem. Last month in Boston, for instance, the police arrested a Bulgarian citizen believed to be part of an international ATM skimming ring. About the same time, a bank in Lafayette, Ind. was scammed. It also happened recently to a couple at their bank in Pooler, Ga. And on and on the stories go.

It happens like this: An unsuspecting consumer goes to an ATM and inserts their debit or credit card. What they don't realize is that at the same time the bank's machine is reading the card, it's also being "read" by a skimmer. So you'll complete your banking activities without a problem, taking or depositing your money. But later, the identity thief will saunter by, unlock the skimmer and take home not just your credit or debit card information but the information of every other customer who used the ATM. Later, after money disappears from your account, you'll realize you were taken to the cleaners.

While it sounds like something only a hapless idiot might fall for, these skimmers are more sophisticated than ever and are extremely difficult for people to detect because the best of them look just like they're part of the ATM. (The website has some chilling photos that will give you a sense of how sophisticated these skimmers can be.) In fact, "the state-of-the-art skimmers employ both a magnetic strip reading and a recording device and a video camera to record customer PINs," says Jack Vonder Heide, president of Technology Briefing Centers, a research and education organization in Oak Brook, Ill., serving the banking and financial industries.

So what's being done about this pervasive problem?

Quite a bit, actually. Banks are well aware of the skimmer scammers out there, and so are the companies that make ATMs. For instance, the NCR Corporation, one of the world's largest manufacturer of ATMs, has an ATM hacking program in place at Abertay University in Dundee, Scotland. The coursework uncovers and addresses criminal hacking threats to ATMs, allowing NCR to approach security needs proactively. The students are trained in what's known as "ethical hacking" and work closely with NCR's Dundee office.

Meanwhile, Wincor-Nixdorf, an IT company that services banks around the world and is one of the largest ATM manufacturers in the world, has developed an anti-skimming technology that employs sensors to check the entire area around the card input slot, searching for anything extra that's been added to the ATM, including false fronts.

Angela Groene, product marketing manager of security at Wincor-Nixdorf, says that their Anti-Skimming II Module will detect anything added to an ATM, and, if something is detected, "a silent alarm is triggered, and additional measurements such as video image recording can be initiated."

Groene adds that they also have monitoring software called ProView, "which can help detect suspicious behavior at the ATM. There's usually a specific pattern to the installation and testing of skimmers."

Protecting yourself
While it's unlikely your bank's ATM has been hacked, you should still take precautions every time you use an ATM. "It isn't rocket science," says Bernd Redecker, head of security solutions at Wincor-Nixdorf, who favors the school of "paranoia and suspicion" when it comes to using an ATM.

But you can't blame him -- he's heard it all. He says he knows of guys who've stood next to people at an ATM, pretending to talk on their cell phone but actually filming the customer, capturing the customer typing in their PIN number. Men have also pretended to help old ladies with the ATM, and then, as they pull her card from the machine, they'll replace it with a worthless counterfeit card. It's critical that you "be aware of who's standing next to you when withdrawing cash at the ATM," Redecker warns.

And, despite the ironies, you're probably safer using an ATM in a crowded place. Sure you have to watch for strange men with cell phones who may be trying to film your PIN number, but you probably won't run into the skimming devices that identity thieves like to use. "The most frequent locations [for ATM skimmers] are those where there's no closed-circuit TV in place," says Groene, "and the criminal feels unobserved."

Which mean the more isolated the ATM, the safer you'll probably feel using it -- but that's when you're at your greatest risk.

Geoff Williams is a frequent contributor to WalletPop. He is also the co-author of the new book Living Well with Bad Credit.

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