ATM cardholders warned over fraud

BANKCARD holders need to be more vigilant around ATM machines due to the growing use of sophisticated electronic equipment to commit fraud.

The Irish Payments Services Organisation (IPSO), the umbrella body for the payments services of banks and building societies, has urged consumers to exercise more caution when using ATM machines.

It follows an incident in Co Meath last Sunday where gardaí believe they foiled a major fraud operation after they seized hi-tech electronic equipment, including a micro-camera, used to "skim" bank card details.

Detectives recovered the surveillance devices and other skimming devices from a stolen car, which had been abandoned by members of a gang believed to have been monitoring PIN numbers used by card-holders at an ATM in Ashbourne.

The micro-camera had been fitted to the machine to record the private, four-figure number used by customers to withdraw cash.

The Garda National Bureau of Fraud Investigation believes a criminal gang has been targeting ATM machines with the new equipment since last October. Garda sources indicated that the gang is from Eastern Europe and first came to their attention in 1999 when they were engaged in pick-pocketing.

IPSO card services manager Una Dillon said the use of a micro-camera fitted to an ATM machine showed that gangs involving in skimming bank cards had acquired new levels of sophistication. "The use of the micro-camera gives the fraudster an additional element of safety as they can read a person's PIN number from a more remote location rather than the usual method of "shoulder-surfing" (looking over the shoulder of someone using the ATM)," she said.

Although some skimming machines are capable of copying data on up to 10,000 cards, Ms Dillon said it was likely that criminals probably only acquire details on less than 100 cards before removing the devices from the ATM for safety reasons.

The main device, nicknamed the Lebanese Loop, is capable of reading the dark magnetic strip which contains the individual card data.

While card fraud is a relatively new phenomenon, IPSO estimates that it is growing at the rate of around 30% per annum. It is believed to cost Irish financial institutions around €30,000 per week. However, Ms Dillon said the vast majority of bank card fraud in Ireland was still related to credit cards, which totalled around €10m in 2002.

IPSO said that all ATM card-holders from whose accounts money was stolen were reimbursed by the financial institutions.

Ms Dillon said the banks were generally able to satisfy themselves about the innocence of the card-holder because fraudulent withdrawals were usually made at a location which made it physically impossible for the genuine customer to be present. With the latest skimming machines, cards can be copied within minutes and used to withdraw money anywhere in the world.

Banks have also begun to introduce a warning system which alerts them to large withdrawals using the same card made shortly before and after midnight due to the daily limit on amounts that can be taken from an account.