Division of Banks Issues Warning About ATM ‘Skimming’

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The Massachusetts Division of Banks (the “Division”) has issued a letter to Non-Bank ATM Registrants in the Commonwealth to warn them about a “concerning increase” in ATM skimming fraud. The Division’s March 16, 2016 letter is published on its website.

ATM skimming involves the collection of debit card account numbers and matching personal identification numbers (“PINs”), which occurs at the time a customer uses or attempts to use an automated teller machine (“ATM”). The Division’s letter explains that criminals engaged in skimming schemes install electronic devices on or around an ATM to collect data from the magnetic strip on a debit card, while a hidden camera captures the customer’s PIN. Sometimes, the Division warned, criminals use wireless devices or external devices plugged into network cables to steal data from a compromised ATM. The stolen data is then used to encode blank debit cards in order to make withdrawals.

According to an article on the Federal Bureau of Investigation’s website, skimming devices “are usually undetectable by users.” “[T]he makers of this equipment have become very adept at creating them, often from plastic or plaster, so that they blend right into the ATM’s façade.” See Taking a Trip to the ATM? Beware of ‘Skimmers’. Additionally, skimming devices are often installed for very short periods of time, and attached to the targeted ATM only by double-sided tape. Id.

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