The skinny on skimming
A recent outbreak of credit card skimming in New South Wales has police again reminding consumers to be careful at ATMs.
NSW Police released images of five persons of interest on 15 June, following skimming activity in Sydney and Newcastle – the latest in a series of incidents dating back to at least 2008.
How does skimming work?
Skimmers install a hidden skimming device over the card entry slot on an ATM and place a tiny pinhole camera where it can read your personal identification number (PIN) as you enter it. The skimming device copies the information stored on the magnetic strip of your card; then the thieves create a new counterfeit card loaded with that information and go shopping or withdraw cash using your PIN.
You generally won't notice you've been skimmed unless you check your balance, or your bank is on the case and alerts you of suspicious ATM activity outside your normal habits.
Skimming also occurs with EFTPOS machines, where it's even harder to detect – the crooks replace the entire legitimate machine with one they've tampered with.
Are you liable for any loss?
No, but you will need to notify your bank and explain why the transactions are fraudulent. Based on what we've heard from consumers, most banks are fairly quick to respond these days, but it all depends on who you end up dealing with at the bank.
Following a run of skimming incidents in 2013, Steven Münchenberg, chief executive of the Australian Banking Association, said: "When skimming is suspected, banks will conduct an investigation and funds are restored to customers who are the innocent victims of this crime. The bank wears the loss."
"If a bank suspects fraudulent activity, customers' cards may be blocked to ensure fraudulent transactions cannot continue," Münchenberg added. "In addition, a bank staff member may contact the customer to discuss any unusual activity, such as the card being used overseas when it is usually used domestically."
Commonwealth Bank says it will refund any fraudulent transactions "within five days from when you report the incident to us".
ANZ says it will credit your account with the amount lost as long as you "didn't contribute to the loss" and you notified the bank "promptly" about the fraudulent activity.
The other banks we checked have similar polices.
How can I avoid getting skimmed?
- Shield your PIN when using an ATM or EFTPOS terminal by using your free hand to cover the keypad while you enter your PIN.
- Treat your card like cash and don't lose sight of it. For instance, it's generally not a good idea to hand your card over to a waiter or shop assistant and let them go in the back room with it.
- Get your card back straight away after completing a purchase.
- Check your account balance online regularly and report any unauthorised or suspicious transactions immediately, even if only very small amounts are involved.