While credit and debit cards make life more convenient on the go, there have been a number of skimming incidents at credit unions around the country, including at the $1.023 billion Northeast Credit Union in Portsmouth, N.H.
"We're seeing more and more of this type of fraud, and credit unions need to be more aware where they place their ATM machines and their cameras," said John Bennett, a spokesperson for the Portsmouth, N.H. police department. "Nothing seems to be able to stop these types of thieves, and you have to be very aware when you are using an ATM these days."
It's alarming how easy it is to install a credit card skimmer, which captures information from a card swiped at a point-of-sale system. A recent video released by the Miami Beach Police and posted to CBS Miami's Facebook page shows two men attaching a skimmer to a gas station payment terminal. In the video, one man distracts the store clerk with polite conversation and a request for some items behind the counter. While the clerk gets the merchandise, a second man slips the skimmer over the POS system. The device is installed within a matter of seconds.
Barry Wills of San Diego, Calif., has twice been a victim of credit card theft. "Once, while I was on vacation, the crooks cleared out my checking account and they figured out a way to get an advance on my paycheck and steal even more money," he said. "It was a mess that took quite a while to clear up, but luckily I had plenty of cash on me, so I didn't end up stranded and penniless."
The second time Wills was robbed, identity thieves stole his debit card information without ever laying their hands on the card: They used a skimmer.
Wills' credit union alerted him to the fraudulent charge attempts, nipping it in the bud and sending him a replacement card with a security chip.
"[The chip card is] supposedly less susceptible to these types of attacks," Wills said. "Still, it's enough to make you worried about all the data you're carrying around in your wallet, so I'm sticking to cash when I can."
According to the FBI, to minimize the odds of being skimmed, credit unions should install their ATMs inside as opposed to right out in the open, where skimmers are more readily installed. Advise your members to consider using cash or credit cards (which can provide better fraud protection than debit cards) at high-risk establishments like gas stations and payment kiosks.
The $2 billion United Federal Credit Union is one institution that takes skimming seriously, using anti-skimming device readers on all of the ATMs in their fleet. The mechanism is equipped with technology that sends the machine out of service as soon a foreign device is detected or the machine fascia forcibly removed. Newer card readers allow users to insert their card with the long edge first, which renders a skimming device useless. UFCU staff members also visually inspect each ATM every day for suspicious devices.
In reality, classic skimming attacks are here to stay, and will likely continue to be a problem even after credit unions complete the shift to EMV chip cards, according to Stefan Tanase, a security researcher at Kaspersky Lab. Even with chip cards, in order to be backwards compatible with non-chip-reading machines, data need to be stored on the card's magnetic strip. Months after the EMV card rollout, many merchants still require customers to use the magstripe.
Urge your members to check their credit card scores monthly — new chips won't keep card information from being swiped online or in a corporate data breach, so members must regularly monitor financial accounts for fraud. According to Credit.com, signs of identity theft include a sudden drop in credit scores or unfamiliar accounts showing up on a credit report.
While many people say they only use only cash due to increasing fraud, the bottom line is that, no matter what type of electronic payment your members use, thieves will find a way to exploit it.
"I'd love to just go off the grid and use cash exclusively, but it's not really possible," Wills said. "Good luck trying to borrow money without establishing credit in your name — not to mention that having a credit or debit card is pretty much mandatory for certain things like renting hotel rooms or cars. I guess I'll just have to risk it."
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