ATM Attacks Remain Leading Pain Point for Banks Worldwide

By October 4, 2017Blog, Resource Center

But Have Fraud Losses Linked to ATM Crimes Actually Declined?

In spite of big investments in chip cards and chip readers, now the world-over, ATM-related crimes and attacks continue to climb. But have fraud losses linked to these evolving ATM crimes actually declined?
That seems to be a hard question to answer.

EAST, the European ATM Security Team, in July reported that card skimming at ATMs continues to plague most European countries, including those where EMV has long been adopted. In fact, EAST notes that the use of internal skimming devices, which are skimming devices actually placed inside motorized card readers – rather than the traditional placement of ATM skimmers, which is over the fascia — continues to spread.

Nine European countries reported these types of attacks for the first half of the year. These attacks are called “eavesdropping skimming,” and had remained relatively localized to the United Kingdom until recently. Now they are spreading to the U.S. In March, FICO, which monitors and tracks debit card fraud in the U.S., reported an alarming uptick in skimming attacks, as well as the types of methods used.

More than half of the skimming attacks tracked by FICO were waged against non-bank, off-premises ATMs. The remaining 40-plus percent included attacks against on-premises bank-owned or operated ATMs (at about 25 percent), and retail point-of-sale systems (less than 25 percent). ATM skimming is clearly an ongoing and even growing problem. And, sadly, it’s not the biggest ATM-attack trend plaguing ATM operators.
EAST notes that, perhaps even more concerning than skimming attacks, is the significant increase its members have seen in the first half of the year in physical attacks against ATMs, namely via the use of explosives.
Ram raids and ATM burglaries were reported by nine countries during the first half of the year, with nine countries additionally reporting attacks waged via explosive gas. “The use of solid explosives continues to spread,” EAST says. “This is of increasing concern to the industry, due to the risk to life and to the significant amount of collateral damage to equipment and buildings.”
But the ATM Industry Association, a global ATM deployer consortium, at the end of 2016 actually found that global ATM-related fraud or crime losses dropped from 2015 to 2016.

Of those who responded to ATMIA’s annual survey, only 42 percent reported “a general increase in ATM crime,” versus 51 percent a year earlier.

In isolation, these percentages don’t tell us much. But relative to what we know about the emergence of evolving attacks against ATMs, such as those involving the installation of internal skimmers, and the resurgence of tried-and-true attacks, like those involving explosives, we can see that, in spite of the number of attacks going up, actual losses linked to those attacks are declining. And there are a number of reasons for this phenomenon.

For one, industry alerts about emerging fraud trends, like the alerts from EAST, ensure ATM operators and law enforcement are aware of the latest trends. Big investments also made in recent years to enhance ATM security, through the deployment of EMV chip and PIN, especially in the U.S., and in anti-skimming technologies the world-over, has given banks incentive to keep close eyes on their ATMs’ transactional analytics and cash balances.

If any anomaly or hiccup is detected, banks and ATM-network operators usually know within hours, rather than days.

Additionally, a more cooperative and collaborative relationship with law enforcement has helped to ensure communications about emerging crimes and schemes are ongoing between the public and private sector. As more law enforcement agencies across borders communicate, the amount of time a new ATM scheme has to cause devastating damage is greatly reduced.