What is bank fraud?

Bank fraud is the use of obtain money, assets, or other properties owned or held by a financial institution. Bank fraud also involves obtaining money from depositors by fraudulent posing to be a bank or financial institution or a bank representative.

What about ATM fraud?

On the other hand ATM Fraud involves card skimming whereby gadgets known as skimmers are inserted in the ATM to steel ATM card details so that the schemer can develop a duplicate card and withdraw all your money.

Most of what the press call ATM Fraud is actually PIN Fraud (or Debit Card Fraud), whereby counterfeit cards are used to withdraw cash from vATMs by fraudsters employing PINs compromised at Point of Sales terminals in the retail environment.

Therefore, the best security against ATM Fraud is protesting your PIN.

Are ATMs the easiest target for fraudsters?

Wherever there is cash, there is the potential for crime and the ATM is no exception; however; only a tiny fraction of criminal incident occur at ATMs in comparison to the huge volume of usage at the more than 1.5 million ATMs worldwide. Less than 1 percent of all ATM transaction globally are affected by crime or fraud. However, it is still our mandate as the banking fraternity to ensure that we clamp down on these crimes.

Millions of ATM transactions are successfully carried out every day around the world without problems or interference by criminals and fraudsters. The ATM has been used safely for over three decades and has a proud safety and service records over that period. The ATM is arguably the most popular and easy way that consumers access their cash.

Is anything being done about ATM fraud?

The banking industry is aggressively addressing fraud. There are various initiatives coordinated at the global levels involving Interpol to ensure that ATM Fraud does not spread. Individual countries are also conducting awareness campaigns among the public to ensure that we all remain vigilant.

Are ATM transactions becoming especially risky?

No. All payment systems are subjected to fraud. None are totally foolproof. Currency can be stolen or counterfeited. Credit cards can be skimmed and reproduced. Checks can be stolen and cashed, counterfeited, or kited. Also, the customer is in control of which ATM he or she chooses to use and when.

If anything, ATM transactions, like most of electronic payments, create an electronic audit trail that can provide valuable information in tracking and prosecuting ATM fraud.

Millions of ATM transactions are successfully carried out every day around the world without problems or interference by criminals and fraudsters.

Are ATMs not located at bank branches more likely to be compromised by fraud that bank branch ATMs?

Not at all. First, off-premise or independently owned ATMs are subjected to the same network rules that govern machines that are owned by banks. Second, in order to be connected through an ATM network, non-banks owners of ATMs must be sponsored by a financial institution. The financial institution is responsible for maintaining the same dependability for those machines as of its own.

If ATM fraud has not changed, why is there such an increased focus on it now?

What has changed is the nature of ATM fraud. It’s no longer just someone shoulder surfing (looking over someone’s shoulder to get information) or robbing a consumer walking away from a machine. Now it may involve elements of organized crime – people who study the industry for years in order to perpetrate a systemic pattern of fraudulent activity.However, this is an industry whish for over 30 years has successfully stayed ahead of the “bad guys”. This is a competitive industry. The race for market leadership continues to produce safer machines, more secure software and better operating rules to protect all consumers.

How closely does the banking industry work with law enforcement and fraud prevention groups?

Very closely. Law enforcement and fraud prevention groups, including the US Secretary Service, the UK Metropolitan Police Service and the South African Fraud Prevention Services are part of the Global ATM Security Alliance that is working out strategies for dealing with international ATM crimes. In addition, various partnerships have been formed between industries and security groups around the globe, like the one we’ve launched with the Kenya Police.

Is it still safe to use ATMs?

Undoubtedly, yes. ATMs remain an extremely safe way of accessing money.

  • It is safer to carry around cash and visit a machine when you need cash rather than carry around large sums of money. If your money is stolen you are unlikely to get it back.
  • If you unfortunately enough to be a victim of this type of crime you will get your money bank from the bank, unless you have acted negligently.
    • Can Identity Theft be committed through ATMs?

      No. There is insufficient personal information illegally obtained by fraudsters during ATM fraud to set up false bank accounts or to “prove” personal identity in an impersonation. ATM fraud can involve PIN & Card compromises but cannot provide a fraudster to commit identity theft.