An ATM card skimming scam can ruin a trip, even if you do later get the money back. And if your ATM card isn't from a U.S. bank or other country with strong consumer protection laws, then it's also possible you could be out of luck in ever getting the money back, once crooks have drained your bank account. With summer travel season upon us, here are some tips to preventing an ATM card skimming scam from ending your trip on a sour note.
What are ATM Card Skimming Scams?
ATM card skimming scams are mostly (but not always–more below) carried out on ATM cards with a magnetic stripe, used at an ATM that has been compromised by thieves so that the card details are stolen when you insert the card. The criminals also use either a pinhole camera or an overlay to steal your PIN code information as well. Armed with the financial details of your ATM card, they can then empty your bank account.
There have also been cases of criminals bribing ATM technicians in Mexico to gain access to the interior of the ATM machine, installing Bluetooth circuit boards with their own data storage. This enables the ATM machine to appear exactly as any other ATM machine, and the stolen card and PIN data to be downloaded wirelessly by the thief, as long as he's within several feet of the ATM. See this article by Brian Krebs for more on his tracking of this Bluetooth ATM skimmer gang in Mexico.
Tips to Prevent ATM Card Skimming
1. Reduce Your Use of ATM Cards
Personally I prefer to pay with a credit card as much as possible, both to avoid using ATM cards and to avoid carrying around much cash. Credit cards can also be skimmed, but in the U.S., the Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) means that you are at most liable for $50 for a stolen credit card. In fact, if only your credit card number is stolen but not the physical card itself, which remains in your possession, you're not liable for unauthorized use.
Just make sure you use credit cards that don't charge foreign transaction fees. My favorite travel rewards credit cards that don't charge foreign transaction fees are:
- 55K Chase Sapphire Preferred Visa: 2X Ultimate Rewards points on all travel and dining
- 50K Citi Prestige MasterCard and 40K Citi ThankYou Premier: 3X Citi ThankYou points: 3X on air travel and hotels, 2X on dining and entertainment
- 50K AMEX Premier Rewards Gold and AMEX Business Gold Rewards Card: 3X on airfare (must be selected as 3X category for the Business Gold Rewards card)
2. Create a Separate Bank Account or Use a Prepaid Card for Travels That You Top Up Only as Needed
Don't make it easy for thieves to drain your main bank account. Instead, create a second account or use a reloadable prepaid card that you only transfer into funds as needed, which you then withdraw promptly at an ATM. And make sure that you decline overdraft protection, so that there is no automatic refilling of this second account from your main account. That way, if the thieves do steal your ATM card information and try to overdraw the account linked to your ATM card, the transaction will simply be declined.
3. Only Use ATM Machines in Banks, Not Stand Alone ATM Machines
ATM machines in banks, which are embedded in the bank itself and under heavy surveillance, tend to be safer than stand alone ATMs at gas stations, convenience stores, supermarkets and even airports (yes, in the Krebs article above, he notes that one of the Cancun Airport ATM machines was also compromised by the Bluetooth skimming gang).
4. Don't Use ATM Machines in Mexico
As mentioned in this Krebs article, he found hacked ATMs in Cancun (specifically, the Marriott CasaMagna Cancun), but also at the Barcelo Cancun, Tulum, Playa del Carmen, Cozumel and the Cancun Airport. At this point, going somewhere other than Mexico may start sounding like a more relaxing vacation idea, but if you're not dissuaded, at least try to not use any of the ATMs.
5. Check the ATM for Any Loose Parts and Keyboard Overlays
Jiggle the part where you enter your card–if there are any slightly loose parts, don't use the machine. Similarly, if you find that the keyboard where you enter in your PIN seems a bit too thick or loose, don't use the machine–there may be a keyboard overlay that would capture your 4 digit PIN as you enter it.
6. Cover Your Hand When Entering Your PIN
Naturally covering your hand that is entering the PIN won't help if there's a keyboard overlay, but it will help if there's a hidden camera somewhere that records you entering your PIN.
7. Get Notified of All ATM Withdrawals and Check Your Account Balance Often
If possible, set up your bank account to automatically notify you of all withdrawals, and if that's not possible, check your account balance regularly whenever you're making ATM withdrawals.
What to Do If Your ATM Card Has Been Skimmed
If you notice unauthorized withdrawals using your ATM card, notify your issuing bank immediately so that your card can be deactivated and your account frozen, preventing any further withdrawals. If you notify your bank (if it is a U.S. bank subject to the FCBA and EFTA) within the first 2 business days of learning of the loss or theft your maximum liability is $50. Don't delay, since if you notify your bank more than 2 business days but fewer than 60 calendar days after your statement is sent to you, your liability jumps up to $500.
While I'd like to say you should always notify the police of the loss, I'm reluctant to suggest this for Mexico or places similar to Mexico, where the police may be corrupt and taking bribes from the criminal gangs that are actually perpetrating these ATM skimming scams. Use your best judgment.
Have you ever had a problem with ATM card skimming, or suspected an ATM you were about to use had been hacked?
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