Addressing the Risks of Card Skimming

According to the FBI, card skimming operations cost consumers and financial institutions more than $1 billion each year. FICO’s 2022 data revealed a dramatic increase of card skimming operations with reports that “total compromised cards were up 368% from 2021, with more than 161,000 impacted cards identified.” This upward trend emerges despite advancement made towards the prevention of skimming, posing a threat to every institution including those armed with the latest skimming detection technology.

Criminals are constantly searching for ways around existing anti-skimming solutions—willing to implement their latest workaround to put the cardholder at risk without warning. This data compels financial institutions, retailers and others to combat this crime and further reduce risk to better protect their patrons’ personal information and assets.

To better secure customers’ data, the fundamental mechanisms of a skimming operation must be understood. There are two key components to a skimming operation: a camera, required to capture the PIN entry, and a card skimming device. There are two types of card skimming devices, an overlay skimmer which covers the full exterior portion of card reader bezel, and deep insert skimmers which are placed inside the card reader. Oftentimes the overlay skimming devices are high quality and look like a legitimate card reader, making it difficult to identify unless you look closely.

Protect Your Banking Data

Due to the inconspicuous nature of these devices, daily inspections must be performed to help prevent these crimes from taking place. Here are a few recommendations to look for to identify any additions to or tampering with the ATM fascia:

• Use a picture of the ATM as a baseline for daily inspections. This way, any tampering with the original fascia can be easily detected
• A pinhole camera located near the pin pad is usually visible upon close inspection
• A deep insert skimmer, or a device placed inside the card slot of an ATM, can be seen in the card reader as well
• Pull on the card reader bezel to ensure there is not an overlay attached

While physical and visual inspections of ATMs are effective, there are other real-time indications that skimming may be occurring, like an increased number of fallback transactions. This increase may be caused by cash out situations where non-chip cards contain stolen mag stripe data from chip cards. We recommend that financial institutions consider disallowing fallback transactions.

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