ATM Fraud Growing in United States

Experts point to the large number of nonbank-owned ATMs as the reason.

April 13, 2016

NEW YORK CITY – Fraud at U.S. ATMs is accelerating at an alarming rate, particular for nonbank-owned ATMs, Business Insider reports. A recent FICO study uncovered the number of ATMs compromised by thieves soared 546% from 2014 to 2015. Nonbank-owned ATMs accounted for 60% of fraud last year, compared to 29% of the year previous.

The majority of ATM fraud happens via skimming, in which a thief inserts a card-reading device inside the machine to capture card number and keypad entries. Debit card fraud is also on the rise, with 30% of all retailer fraud loss stemming from debit cards during the first quarter of 2015. Overall, debit cards have been much slower to change to EMV or chip cards than credit cards.

ATM migration also factors into the high fraud rates, because ATMs won’t assume liability for fraud until this fall at the earliest. While security updates are continuous for ATMs, nonbank-owned ATMs will probably stay vulnerable. Many of the major U.S. banks are looking into cardless, phone-based ATMs to slash the chances of fraud even more.

That means, nonbank-owned ATMs will continue to be a plum target for thieves to use skimmers and other means to capture customer data. The cost of fraud for U.S. retailers hasn’t stopped climbing, reaching an estimated $32 billion in 2014, up sharply from $23 billion in 2013.

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