ATMs

ATM Crime, ATM Fraud Overview

ATM Crime: Attacks against ATMs may be classified as either ATM physical attacks or ATM fraud.

ATM Physical Attacks:

ATM physical attacks are normally perpetrated with the intention of gaining access to the cash or other valuable media within the ATM safe or ATM security enclosure.  ATM Fraud

There are many different categories of ATM fraud. In general ATM fraud can include any deliberate 'criminal' technique which involves the use of an ATM to obtain something of value to the perpetrator. The most common types of ATM fraud include  Card Theft (e.g. Lebanese Loop) , PIN Compromise (e.g. Shoulder Surfing), Card Skimming, Cash Trapping, Transaction Reversal and Deposit Fraud.

ATM Fraud in more detail:

Card Theft

Card theft is where the perpetrator physically obtains the consumer's card at or in the vicinity of an ATM. The most common method of card theft is Card Trapping. The most popular method of trapping a card at the ATM is known as Lebanese Loop. A Lebanese Loop is designed to be entered within the card entry slot of the ATM card reader in such a way as it does not prevent the consumer from entering their card, but it does prevent the ATM card reader from ejecting or returning the card to the consumer. The perpetrator can subsequently remove the trapped card once the consumer has departed from the ATM with the belief that the ATM has captured or swallowed their card. Other methods of card theft include card swapping where the consumer's card is exchanged for a card of similar appearance. This distraction method is often executed at the time that the consumer's card is being returned or ejected to the consumer following a transaction at the ATM.

Keyboard overlays are devices which are designed to look very like the genuine ATM key pad and are fixed on top of the genuine key pad. Sophisticated ATM Infrastructure Hacking, Architecture Hacking, Network Hacking, Social Engineering, Phishing and various other methods are also used to compromise PIN codes.

Card Skimming

Card skimming involves making a copy of the information encoded on the magnetic stripe of the card. When installed correctly they allow normal operation of the ATM in that the consumer's card is entered and returned correctly, however the magnetic stripe is copied by the skimming device. One of the most effective ATM skimming devices is known as the Sofia skimmer. Cash Trapping

Cash trapping is the term used to describe attacks where the consumer's cash is trapped and prevented from being presented or delivered to the consumer. Deposit Fraud

Deposit fraud covers a variety of criminal techniques from making false deposits, trapping deposits through skilful manipulation of the deposit accepting device. Avoiding ATM Fees

Last year ATM users paid fees that poured an estimated $4 billion into financial institution coffers.

According to the 2001 U.S. PIRG survey of banks and credit unions, the cost of using another bank's ATM machine is now $2.86 per transaction, up from $1.01 just five years ago.

(At big banks, the average is $1.52.)

About 30 to 70 cents of this fee is known as the interchange fee and goes to the bank whose ATM you used as compensation for handling the transaction. Even if your bank does not charge you when you use another institution's ATM, it pays this fee.

The second fee, a surcharge imposed on you by the other bank for using its ATM, is now $1.47 ($1.55 for big banks) according to U.S. PIRG. These fees show up right on your ATM receipt.

So far, Iowa is the only state with an active ban on ATM surcharges. Banks point out that the fees pay for more ATMs, making ATMs even more convenient for consumers, and to maintain, protect and advertise ATMs.

Whenever possible, use your own bank's or credit union's ATMs, which should avoid all ATM fees. Switch to a bank or credit union that doesn't impose ATM surcharges. Generally, the larger the bank, the higher the fees. Bankrate.com also surveys ATM rates for large banks and thrift institutions in 35 major metropolitan areas. See if your area has a regional alliance of banks or credit unions whose members agree not to impose surcharges on each other's ATM customers. Beware of non-bank ATMs

Fees there are often higher than at banks.

Use travelers' checks or credit cards

when you are on the road (but not credit card cash advances, which are even more expensive than ATM withdrawals). If you are traveling outside of the U.S., ask your bank if any additional fees or surcharges 

apply to ATM transactions abroad and switch institutions if they seem too high.

What are the benefits of having an ATM?

Earn Surcharge Revenue

Every time someone uses your ATM you earn the transaction fee, which is a fee charged to the user of the ATM. The average transaction fee is around $2.00 nationally. Accept All Credit Cards For Free/Reduce Credit Card Fees

Unlike a credit card terminal, there is no 2% - 3% processing fee every time a transaction is made. If you currently accept credit cards, you will see a reduction in credit card fees of up to 25% or more because more customers will use the ATM instead of your credit card terminal.

Increased Customer Spending

Customers that have cash spend more than non-cash customers. 7-11 found that ATM customers spend 25% more than non-ATM customers. In bars and nightclubs, most of the cash withdrawn from ATM is spent inside the business.

How much can you earn by having an ATM?

Between 5% and 10% of your total customers will use the ATM.

We will use 5% for the number that will use the ATM. 200 x .05 =10 customers that will use the ATM daily.

10 x 30 = 300 transactions per month. By having an ATM, you won't have to send customers away to get cash ever again. Plus, by having an ATM, you will attract more customers that will spend money in your business.