Securities Industry News

A weekly roundup of news and developments in data security
Wednesday, 15, April 2009

Automated teller machine skimmers, which covertly read and store card data as customers use the machines, are getting caught by customers, but that may not deter the fraudsters who plant the gadgetry.In the past two weeks skimmers at three JPMorgan Chase & Co. ATMs — two Chase-branded ones in New York and a Washington Mutual-branded one in West Hollywood, Calif., — were found and reported by readers of two blogs: Gawker Media's Gizmodo and Consumers Union's Consumerist.The skimmers on the Chase-branded machines were notable for mimicking the translucent green material used to make the card slot in the NCR Corp. machines. The one found on the Wamu-branded machine was made from opaque gray plastic.

Since a customer's personal identification number is not stored in the card stripe, skimmers are typically paired with a camera near the ATM. In the New York instances, customers found the camera hidden behind a mirror adhering to the machine's surface.Rob Evans, director of industry marketing for NCR's financial self-service group, told American Banker last week that skimmers can cost up to $5,000. The potential profits are so great — and the potential consequences so light — that the bad guys are willing to risk losing the devices, he said.Perpetrators are typically charged with "fraudulent use of an access device," which Evans said carries a typical sentence of no more than 18 months.