MILLIONS of dollars are stolen each year by “skimming” people’s bank transaction details.
A court case in Melbourne last week highlighted a “nightmare” scenario of offenders using new techniques while customers withdraw cash from ATMs.
The case involved “cash trapping”, whereby offenders insert a tool similar to a fork into an ATM during a small withdrawal, causing the cash dispenser to jam.
The “forking” scam was recently described to a judge who heard that four men had conspired to defraud $184,920 from 248 ATMs, most of them in suburban Melbourne, from December 2012, to March last year.
The skimming typically involves attaching a device to an ATM that can read encrypted information on the card while a small camera records the customer’s PIN.
In NSW, police last year warned a gang was installing such devices in Sydney ATMs.
But while the recent scams were a worry for consumers, the amount of money lost to this type of fraud has been falling in recent years.
Technology is playing a key role in banks’ fight against the practice. Newer ATMs are designed to make cards unreadable to skimming devices.
In ATMs with this “jitter” technology, the card vibrates while entering and leaving machines.
Growth in cards that use microchips and PINs instead of signatures is also helping reduce skimming at merchant terminals.
Statistics from the Australian Payments Clearing Association show $37.8 million was lost last financial year to counterfeit and skimming fraud on all credit and debit cards issued in Australia, an annual fall of 29 per cent.
But the amount lost to skimming in Australia rose 4 per cent to $24.3 million and an increase in ATM skimming was the main cause.
The Australian Bankers Association last year said the incidence of credit-card skimming had halved since 2011, while skimming of debit cards had fallen two-thirds since 2009.
If consumers have been skimmed, their banks are required to refund the money.
Victorian County Court judge Liz Gaynor described the violation of bank accounts as “nightmare stuff” that placed the community at risk and undermined confidence in the banking system.