Scam Busters: ATM Skimmers

ATM users, be on guard!

No matter how careful you may be with your account information, tech-savvy criminals can still access your account after you make a withdrawal by using electronic tools called skimmers.

Skimmers are portable electronic devices that record your bank account information. Consumerist reports that a reader found a skimmer attached to a Washington Mutual ATM (Stock Quote: WM) recently.

"The card reader didn't look right, like it wasn't completely attached," a reader quoted as Dan told the site. Dan reportedly pulled the skimmer off and alerted authorities. "It was set up so that ATM cards would first go through the skimmer and then into the ATM itself, so you'd never know the difference."

But you'd certainly know the difference when your bank account was cleaned out. The most popular skimming product has a 512 kb memory chip capable of storing 3,000 different accounts, according to Jim Pettitt, director of strategy and planning for Diebold Inc. (Stock Quote: DBD). According to one site, a one day net for skim scammers can be as high as $50,000.

How Skimming Works
Hank Monaco, vice president for ADT Security Services (Stock Quote: TYC) says skimming is a multi-step operation.

Once a skimmer is attached to an ATM machine, the criminal must also place a miniautre camera in a spot where it can capture you as you’re dialing your PIN. Margot Mohsberg, a spokesperson for the American Bankers Association, says the camera is usually fixed above the keypad, but a scam artist may also stand close behind someone as they dial in.

Next, the criminals wait as information from each transaction is loaded into the skimmer and time stamped. At the same time, the video camera records each customer as they punch in their codes.