Skimming - A New Type of Crime

Today’s Globe has a fascinating front page story that explains the arrest of a man who allegedly stole more than $400,000 from numerous bank accounts. How did he get the money? By withdrawing it from ATM machines with duplicate ATM cards. According to the police, this scheme is called “skimming.” Here’s how it worked. The criminal obtained a magnetic strip reader, a relatively common device available for less than $1000 on eBay. He would then mount this device at the ATM’s location, either at the entry door that requires users to swipe their cards to gain access or somewhere on top or in front of the real card reader. In either case, unwary bank customers would swipe their ATM cards, allowing the bogus card reader to capture and store the information encoded on the magnetic strip of the real card. The perpetrator would also mount a tiny video camera near the ATM keypad. This would transmit video of the customer poking his PIN number into the ATM’s keypad back to the criminal’s notebook computer screen. As soon as the customer left, the criminal would retrieve the data from the magnetic card reader, use it to format the magnetic strip on a new card with the same information, then write down the PIN number on a paper sticker attached to a card. Then, either he or an accomplice would go to another ATM and withdraw as much cash as possible from the account. When asked how an individual can defend against this kind of operation, the police had two suggestions. Whenever you use an ATM or any kind of card reader, look for anything suspicious or out of place. If something doesn’t look right, it probably isn’t. The other thing you can do is use your free hand and body to block the view of others as you enter your PIN number. I once saw a report by a police officer who was assigned to a major airport. He explained that one day he saw a nice looking family grouped together while the father filmed them with a video camera. The next day, the same family was in the same place shooting the same video. He grew suspicious, but it was only on the third day of seeing this that he realized that the background for this family portrait was a bank of pay telephones and the video camera was being used to record callers entering their phone credit card numbers which would then be used by others for all types of purposes. Here on the registry blog, we’ve often written about identity theft and its consequences. This story is further evidence that this stuff really does happen, so it’s incumbent on all of us to take it very seriously.