Cyber hacks are not the only way criminals get access to your bank account. The relatively old school practice of installing "skimmer" devices on ATMs still works pretty well.
Despite the practice of many banks to refund customers' money lost to skimming, the FBI estimates the crime costs consumers $1 billion a year.
A skimmer is device a thief places over the real card reader on an ATM. It looks like a card reading device but it "skims" the data from the ATM card's magnetic strip and records it.
There is a second component to a skimmer -- a tiny camera that records key strokes when customers enter a PIN. With both pieces of data, a thief can then clean out consumers' bank accounts.
New York case
The FBI used the recent arrest and prosecution of a defendant in New York to elaborate on these schemes and to inform consumers about how to avoid them. The FBI charged a Romanian citizen with installing numerous skimmers at ATMs along the I-87 corridor around Albany, N.Y.
The agency says the defendant installed the devices at night, when no one was around. The FBI described the devices as relatively primitive—two simple pieces of metal with a skimmer hidden in one and a camera hidden in the other. However, they were effective enough to do the job.
The defendant and his accomplice, who has since fled the country, would only leave the equipment in place for 24 hours or so. In that time they could gain access to dozens of accounts. With the stolen data, they created their own ATM cards and pulled money out of the victims' bank accounts.
If a bank noticed the skimming devices, losses could be reduced. If they didn't customers could lose all the money in their accounts. At one bank, the FBI said the defendant walked away with $63,000. The haul from three banks added up to $127,000.
How to protect yourself
The FBI urges consumers to be careful when and where they use an ATM and learn how to identify tampering. Anywhere there is a card reader, such as gas pumps, there's potential risk.
“You really should be cognizant of where you’re using one,” said FBI Special Agent Paul Scuzzarella. “If it’s in a hidden area in a building, like in a gas station around the corner, who knows who’s back there. If it’s in the main area, it’s less likely someone has tampered with that.”
If you notice anything unusual on an ATM, you shouldn't use it. For that reason it pays to use a single ATM regularly. That way you are familiar with the way it is supposed to appear and operate. If something doesn't look right, don't use the ATM and notify the bank.