ATM Fraud A Growing Crime
STAMFORD, Ct. - (08/03/05) -- Fraud and theft at the cash machineis increasing exponentially, with as many as three millionAmericans victimized over the past year, according to a new studyby Gartner, Inc. Those incidents caused an estimated $2.7 millionin losses, with credit unions and banks covering most of thelosses, Gartner said. Most of the fraud is conducted bycounterfeiting ATM/debit cards with just account numbers and PINs.In most case, the card-issuing institution is not validatingsecurity codes on the magnetic strip of the card while authorizingtransactions, according to Gartner, a financial servicesconsultant. Gartner said credit unions and banks can help stopthese attacks, but few have made the effort to do so. This can bedone by modifying their ATM host systems to check for security dataon a card's magnetic strip. This data is unknown to customers and,therefore, cannot be phished. Thieves generally cannot duplicatethis security strip unless they have insider knowledge of thecredit union's or bank's algorithms and security codes.