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.
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Criminals are constantly searching for ways around existing 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 skimming device, a fake card reading device usually placed on top of the original, legitimate card reader. Oftentimes these 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 actions must be taken 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 and other card reader fascia:
- Use a picture of the ATM as a baseline for daily inspections. This way, any oddities or 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
While physical and visual inspections of ATM, POS terminals or fuel pump fascia are effective, there are other real-time indications that skimming may be occurring, like an increased number of fallback transactions. This increase may be due to cash out situations or non-chip cards with stolen chip card data, which can be addressed if an institution considers disallowing fallback transactions.
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