Sunday News

ATM fraud more complex, costly
BY JENNIFER BJORHUS, Minneapolis Star Tribune

ATM swindles have moved beyond mere skimming, which bad guys commit by planting tiny cameras on gas pumps, for instance, to spy on your swipe and steal your cash.

U.S. financial institutions have been put on alert for a potential round of more sophisticated, and more costly, ATM cash-out fraud schemes.

Both credit card juggernaut Visa Inc. and Fair Isaac Corp., a leading payments fraud analytics company, issued separate alerts to clients recently with general warnings about the potential risk of ATM cash-out fraud schemes.

A copy of the data security alert sent by Visa to clients earlier this month and obtained by the Minneapolis Star Tribune, warns of cases in which organized criminal groups in various parts of the world have been plundering cards and accounts by penetrating internal networks at financial institutions.

"In a recently reported case, criminals used a small number of cards to conduct thousands of ATM withdrawals in multiple countries around the world in one weekend," the Visa advisory begins.

It goes on to say the hackers are "gaining access to issuer authorization systems and card parameter information," to manipulate daily withdrawal amount limits and card balances, among other things, "to facilitate massive fraud on individual cards."

"In some instances over $500K ... has been withdrawn on a single card in less than 24 hours," the advisory reads.

It urges card issuers, which include banks and non-bank companies, and ATM acquirers and processors to review their monitoring for transaction velocity, for instance.

Visa would not discuss its advisory. A spokesman said the alert was confidential and only for clients.

Payments experts and data security pros say Visa's advisory is notable because the activity described goes beyond conventional ATM cash-out fraud schemes, such as skimming.