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Study finds ATM fraud hot spots

By Marcie Geffner · Bankrate.com
Wednesday, March 20, 2013
Posted: 4 pm ET

California, Florida and the Northeast U.S. were the top hot spots for ATM fraud in 2012, according to new data from FICO, the company in San Jose, Calif., that developed the FICO credit score.

Altogether, 46 percent of card skimming activity tracked last year by the FICO Card Alert Service occurred at bank ATMs. Another 36 percent took place at retail point-of-sale, or POS, terminals, and 18 percent happened at so-called nonbank ATMs, which are privately owned and operated by companies that aren't banks. Nonbank ATMs are sometimes referred to as off-premise or white label.

The 2012 data differed significantly from the data that FICO collected in 2011. In that year, 79 percent of skimming incidents occurred at POS terminals, largely due to a multistate crime ring, the company said.

Skimming refers to installing a surveillance device that captures data when a card with a magnetic strip is used in an ATM or POS terminal, according to the Federal Bureau of Investigation. The device, possibly a camera or dummy keyboard, is designed to be difficult to see and might be removed within a few hours to aid in the deception and avoid detection. The stolen data are encoded into new cards, which are used to make purchases or cash withdrawals from victims' accounts.

John Buzzard, FICO card alert service manager, said in a statement that ATM skimming has been the prevailing type of this kind of fraud because ATM transactions require only a personal identification number, or PIN, not a signature.

"Skimming at bank-owned ATMs and white label/off-premise ATMs increased in 2012, and California, Florida and the Northeast were hit particularly hard," Buzzard said.

The FICO Card Alert Service analyzed more than 65 percent of all ATM transactions in the U.S., according to the company.

FICO Fraud Chief Doug Clare said in a statement that card fraud continues to be a problem, but technology is making payment fraud increasingly difficult for scammers to commit.

Have you ever been the victim of ATM fraud? If you were, please tell us about it.

Follow me on Twitter: @marciegeff.

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