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ATM Fraud

ATM skimming, a sophisticated fraud involving capture of card information as well as the user’s PIN, has landed up on Indian shores. The new fraud is prompting banks to relook at old machines and step up registration of mobile numbers of customers for alerts.

Officials who are part of the ATM industry say that while the industry is coming up with technical solutions to check fraud, ATM users must ensure that their mobile numbers are registered with their banks as RBI has made it mandatory for banks to provide SMS alerts for all debit card transactions from July 2011, irrespective of the amount.

Incidentally, the skimming fraud which took place at an Axis Bank ATM came to light immediately after customers who got SMS alerts of large withdrawals raised an alarm.

Axis Bank’s ATM at Oshiwara in Andheri was the target of fraudsters who had managed to attach a small card reading device over the mouth of the card slot and a matching keypad over the surface of the existing keypad.

The ATM card information and pin numbers were captured by two add-on devices and transmitted to the fraudsters through a GSM connection. This information was used to clone cards at a remote location and withdraw cash from other automated teller machines.

“Such techniques are prevalent in South-East Asian countries like Thailand, Malaysia and Indonesia ,” said Mani Mamallan, chief marketing officer at CEdge technologies. He said while dip cards provided better security, ultimately customers have to be vigilant in checking whether there is any extraneous device attached to the machine.

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The other fraud that is prevalent abroad is one where the fraudster places some block within the card slot to prevent it from being returned. The fraudster then gets the pin by pretending to assist the victim. Sometimes, fraudsters attach a small webcam within the ATM kiosk to record the PIN.

According to Loney Antony, MD, Prizm Payments-a company which manages ATM networks for banks-modern ATMs are fitted with devices which can detect any extraneous device attached to them.

“Although this is the first such fraud in India, ATM manufacturers and service providers are familiar with the technique and know of the defences. Banks will have to take measures to retrofit the older machines as a precautionary measure,” said Antony. His company is asking banks to increase customer awareness through banks statements and notices put up within ATM kiosks.

Source : Times of India.

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