Fraud Protection & Compliance
The latest fraud news from the FICO® Card Alert Service, which monitors hundreds of thousands of ATMs and other readers in the US, is bad. In fact, it’s doubly bad:
- The number of payment cards compromised at U.S. ATMs and merchants monitored rose 70 percent in 2016.
- The number of hacked card readers at U.S. ATMs, restaurants and merchants rose 30 percent in 2016. This new data follows a 546 percent increase in compromised ATMs from 2014 to 2015.
The average duration of a compromise continued to fall — on average, an ATM or POS device would be compromised for 11 days, compared to 14 days in 2015. The 2016 average duration is less than a third of the average duration in 2014, 36 days. The average number of cards affected by a single compromise was cut in half.
What’s behind this startling rise, which is a new record high? Better skimming devices in more people’s hands. If you really want to hack an ATM, you can get your hands on the tech pretty easily. That means we’ll continue to see compromises - and card fraud - rise.
I’ve been asked whether EMV transition is playing a role here. I think it is, but not the role you’d expect.
As ATMs aren’t yet required to be chip-card enabled, the EMV adoption that came into force last year isn’t driving fraud down yet. Instead, we may be confusing consumers — we tell them not to use machines that look funny or have tape on them, and then the cashier tells them to use a POS device that looks funny and has tape on it. You know, machines that look like this:
That said, if you are looking for tips for your customers, here’s FICO’s advice:
- If an ATM looks odd, or your card doesn’t enter the machine smoothly, consider going somewhere else for your cash.
- Never approach an ATM if anyone is lingering nearby. Never engage in conversations with others around an ATM. Remain in your automobile until other ATM users have left the ATM.
- If your plastic card is captured inside of an ATM, call your card issuer immediately to report it. Sometimes you may think that your card was captured by the ATM when in reality it was later retrieved by a criminal who staged its capture. Either way, you will need to arrange for a replacement card as soon as possible.
- Ask your card issuer for a new card number if you suspect that your payment card may have been compromised at a merchant, restaurant or ATM. It’s important to change both your card number and your PIN whenever you experience a potential theft of your personal information.
- Check your card transactions frequently, using online banking and your monthly statement.
- Ask your card provider if they offer account alert technology that will deliver SMS text communications or emails to you in the event that fraudulent activity is suspected on your payment card.
- Update your address and cell phone information for every card you have, so that you can be reached if there is ever a critical situation that requires your immediate attention.