A report stated that between April and September 2020, India witnessed cyber frauds of nearly Rs.100.6 crore related to net banking, debit, and credit card. A sizeable chunk of these frauds also relates to transactions made at ATMs, which is remarkably higher than the ones registered in the previous year.
These increased cases of ATM fraud are blamed on the lack of sufficient security features in the technology used for such transactions along with misinformation among card users, among other reasons. With scammers updating their techniques of concluding fraud, the need for awareness is high more than ever.
Over the years, these automated teller machines have evolved into multi-service providing platforms, further making ATM fraud in India a cause of concern. An individual must, therefore, understand the ways to secure his/her cards from fraudsters with the help of security features offered by financial institutions.
What are the types of ATM fraud one must know?
Many individuals still prefer using cash for shopping or other transactions, which requires them to visit ATMs. Scammers thus use high-end devices and practices for ATM cloning and other data-stealing techniques to conclude unauthorised access and use.
Individuals must know the types of fraud at ATMs to safeguard their financial interests.
- Shimming – It is a form of scamming done by installing a device to card readers used at ATMs and other physical transaction points. The device so installed reads the card number and information with every magnetic swipe, making it easier for fraudsters to proceed with ATM card cloning or other use such as a sale to a third party.
A scammer inserts a device called shim, which is paper-thin in size, enabled with microchip directly into the card slot of a machine. The shim copies a card’s information, which is used to create a magnetic stip version of the card.
To deal with this issue, financial institutions offer the likes of ATM safeguard, an insurance plan introduced to protect card users from a liability arising out of such a fraud.
- Skimming – ATM skimming is the type of scam used by fraudsters to steal the card user’s funds. A report stated that between 2017 and 2020, there have been close to 1,40,500 cases of debit cards, credit cards, and internet banking frauds.
Skimming is one of the reasons giving rise to the crime causing financial distress. A scammer places a small device on the face of the ATM, which is invisible to the naked eye.
Such a device copies the data on a card, which is further used to clone it or to retrieve the PIN. Many scammers place card readers, PIN capture overlays, hidden cameras, and ATM faceplates to steal the data.
- Jackpotting – In a jackpotting attack, scammers would replace the mechanism of an ATM. They hack the software and replace it with a spammy one to operate the machine as per their need. The concept is similar to cash out scam but doesn’t require card data cloning.
- Trapping – In this technique, a fraudster traps the card of an individual via ATM. Card trapping is usually done with a device called a Lebanese loop that prevents a card from getting ejected after a transaction is complete.
A criminal can steal the targeted ATM card PIN via a hidden camera or through shoulder surfing, risking the user’s finances. To prevent such instances from creating unnecessary financial liability, users one can avail fraudulent charges cover and remain protected with a high-value coverage benefit.
Ways to prevent ATM fraud
Users receive information about any unauthorised debits from their accounts at their registered mobile number or email ID. On receiving such intimation, one must immediately report the occurrence to the financial institution.
One requires to be alert and responsibe for card usage to overcome an ATM card skimmer fraud. Take the following measures to do so.
- Scrutinise the ATM before and after a transaction to identify any tampering.
- Always cover the keypads when entering the PIN.
- One must check the credit and debit card statement regularly without fail and immediately inform the finanacial institution in case of unauthorised transactions.
- Don’t panic when the card or cash is stuck. Instead, ask for assistance from the nearest branch of the concerned financial institution.
- Enter an ATM with proper safety installations and security guard to avoid an ATM fraud.
Bajaj Finserv also brings Wallet Care, a customised insurance cover under its Pocket Insurance & Subscriptions, which offers upto Rs.2 lakh for protection against liabilities arising out of frauds like these.
Responsible use of a card at an ATM will help prevent such frauds from occurring and spare you from unnecessary hassles. So, use ATM cards cautiously when making transactions, and stay financially protected with suitable insurance policies in place.
