Skimming is a financial scam that’s becoming increasingly popular, where scammers install hidden devices at ATMs or gas pumps to “skim” your bank account information when you insert your debit or credit card. The scammer can print your information on a new fake ATM card and empty your account.
By now you might have heard about that massive case of ATM theft that happened back in May. In Manhattan, as well as a ton of other countries around the world, thieves stole over $45 million from a massive number of ATMs.
How did they do it? Basically, by taking advantage of the fact that we use technology invented 50 years ago when we’re making financial transactions. As it turns out, the equipment that we use to put money into or out of our bank accounts is horribly outdated. This leaves us vulnerable to more financial scams and other cons.
Scammers Use Gift Cards to Steal Your Money
To make a fake ATM card is relatively simple and it all starts with some good old-fashioned computer hacking. To begin an operation like this, the thieves are first going to need a great deal of cards.
At this point, however, “cards” doesn’t refer to the physical cards. Instead, this basically refers to the information that these cards would have on them. More specifically, the information that the cards would have on their magnetic stripes.
This information is obtained by hacking into the system of a gift card company. In a recent scam that hit Manhattan, hackers infiltrated a gift card database hosted in India. They stole all the information that corresponded with a huge number of cards, and modified it to remove any withdrawal limits. This gave them a virtual treasure trove of gift cards that didn’t have any limit.
A simple magnetic strip reader/writer device can then imprint this information onto literally any card that features one of those magnetic stripes. Viola. You’re now holding an ATM card that lets you take out an infinite amount of money.
A Highly-Coordinated Effort
Once the hackers had imprinted enough cards with all this information, they simply sent them out to agents all over the world.
Since this tech is so easy to exploit, the hackers were wildly successful and stole over $45 million.
Once the agents had the cards, they were instructed by the hackers to use them at different ATMs at a specific point in time.
The cash that was taken out of the ATMs was laundered by purchasing expensive items like cars.
Get with It, The United States
When it comes to transactional security, the United States is astonishingly behind the rest of the world. As Popular Science puts it:
“Pretty much every other developed country got rid of magnetic stripe cards years ago, and many countries are multiple generations beyond that tech.”
That’s right: the magnetic strip that’s been on the back of every card for as you can remember is incredibly easy to hack. It turns out this technology dates back to the 1960s.
There are a ton of more secure ways to handle financial transactions now, and the US is incredibly behind the times. To secure our bank accounts, we need to improve our technology and change our infrastructure to stop skimming and other financial fraud.
What do you think? Has anyone ever stolen your ATM card information? Tell your stories in the comments.
See Also
Scam Alert: New Gas Pump “Skimmers” Can Steal Your ATM Card Info
Identity Thieves Try to Steal Credit Card Data from Florida Nordstrom Customers
Personal Finance 101: When You Should Pay with Debit Instead of Credit (and Vice Versa)
Just happened to me. We recentky returned from a trip abroad. I was sick for a few days so didn’t check my acct. Signed into it on Saturday and in five days someone has stolen almost $4000.00 through ATM transactions. I am getting ready to call my credit union – waiting for them to open. I am sick & devastated about it.