Skimming the cash out of your account
By Laura Bruce • Bankrate.com

A sharp-eyed customer making a transaction at an ATM outside a Boca Raton, Fla., Bank of America branch noticed a gap behind the metal faceplate of the ATM. A closer look revealed double-sided tape was all that kept the faceplate in place. Thinking it looked a tad suspicious, the customer gave a yank and the faceplate came off in his hands.

What the man had discovered was an ATM skimming device. Slide your ATM card into a skimmer and it will read all the account information stored electronically on the magnetic stripe, plus, depending on the sophistication, record your personal identification number, or PIN, as you punch it in on the ATM keypad.

Next thing you know, your checking account is notably lighter.

ATM skimming devices come in two flavors: ones that interfere with the ATM operation and ones that don't.

The skimmers that interfere with the ATM operation are a bit easier to detect because even though customers insert or swipe their cards, it's not the ATM's card reader so the ATM isn't actually being used and the customer isn't getting any money.

That was the set up in the Boca Raton incident.

"They probably cased several ATMs at different banks, looking for an ATM face that they could build," says Detective Pedro Palenzuela of the Palm Beach County Sheriff's Office.

"They used a grayish, fabricated metal container that looked like the same material. It was shaped to fit on the ATM but inside was a small laptop computer. It prompted the customer with a touch-screen instead of a keypad. The ATM had a card reader next to it.

"There was also a sign that said the ATM instructions had changed. The customer would swipe their card and would be prompted -- 'Welcome to Bank of America.' It had all the instructions Bank of America would have. The customer would slide their card and the computer captured the information, saving it to the hard drive and storing the PIN.

"Then the customer would see a screen that says, 'Thank you for using Bank of America. There has been a malfunction.'

"It was a pretty good scam," says Palenzuela.

In other skimming cases, the thieves don't interfere with the normal operation of the ATM. The skimmer is placed over the card reader but doesn't block off the reader, and the customer gets money when making a withdrawal.

Thinking thieves
The bad guys are efficient and competent, says Rob Evans, marketing director at NCR, an ATM manufacturer.

"They're not idiots or drug-addled junkies trying to get $20. They're consummate businessmen. They adjust for the last countermeasure that we put in place. We build the wall higher, but they keep coming back with taller ladders."

It's hard to pin down numbers on just how pervasive skimming is becoming. It's been happening since the late '90s but has become more popular with the criminal element with the advent of smaller computing devices.

It can happen not just at ATMs, but also at cash registers when you make a purchase. Pay your restaurant tab with a credit card and you have no idea what the waiter might be doing with the card when it's out of your sight.

But skimming at ATMs can be much more damaging because of the number of accounts and the amount of money that can be quickly accessed.

Kurt Helwig, executive director of the Electronic Funds Transfer Association, which is spearheading a task force to tackle the problem, says criminals are willing to invest some time and money in skimming frauds because of the potential bounty.

"Twenty years ago, we defined ATM crime as someone getting hit over the head and having their money stolen. Then it was shoulder-surfing, watching someone punch in their PIN and leaving their receipt behind. This is the next step. It's not just a one-on-one robbery. There's a lot of money involved."