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The ATM Machine Scam
Although ATMs create convenience for customers and generate income or cost savings for
banks, they also allow access to criminals, who have multiple methods of fraud in their
arsenal — from sophisticated gadgets that allow them to steal personal information from a
card when swiped, to setting up and operating their own ATMs. Unfortunately crime is a
concurrent element of modern society and it benefits from the same technological advances
that are created to open new opportunities.
What kinds of scams are out there?
• Fraudsters make counterfeit ATM cards by using a skimmer, which is a
card-swipe device that reads the information on a consumer's ATM card. Scammers take a
blank card and encode all the information from an ATM card when they swipe immediately
after the machine's last transaction. The skimmer catches the PIN (personal identification
number) through a small camera mounted on the ATM. The consumer is unaware they've been
scammed because the ATM card has not been stolen and still works at other machines.
• The "Lebanese Loop" is another popular ATM scam. Scammers insert a
portable steel loop into an ATM card slot. The scammer usually approaches the victim while
at the machine, and poses as the person next in line. Victims are advised to enter their
PINs three times and then hit cancel to get the machine to accept the cards. The scammer
is able to memorize the PIN for future use and the machine keeps the card because of the
excessive number of attempts to enter the correct PIN.
Victims leave in frustration because they couldn't get any money and they've lost their
card. Once the loop is taken out of the ATM the scammer has the card and the PIN number
for future transactions. This is a relatively new scam that many experts believe will be
short-lived due to fast technology upgrades.
How can you protect yourself?
• Refrain from using your ATM / debit card when shopping. Use cash or
credit card. If you have a check card, select "credit" instead of "debit". Selecting
"Credit" requires your signature instead of using your PIN to authorize your purchase.
Major credit cards have 100 percent Fraud Protection. With a debit card, you may have limited
protection depending on how soon you notify your bank about the fraud. You also cannot
cannot request stop payment on a purchase you are trying to dispute. Another drawback of a
debit card is you do not establish your credit rating.
• Change your pin regularly. Make it a habit to change your PIN
regularly. This also applies to your email and online bank accounts as well. When you
change PIN, do not use your birth date and digits taken from your telephone or Social
Security number.
• As much as possible, do not use non-bank ATM machines as the risk of
ATM theft scams is higher than machines at your bank. Start going to one bank branch and
use their ATM machine for all your future transactions. This way, you can get familiar
with the machine (card slot or card reader) and its surroundings (number of security
cameras and where it is located).
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