Banks to Spend Big to Beat Card Skimming
With ‘card skimming’ on the rise in Scotland, banks are to spend hundreds of thousands of pounds in order to beef up card security at ATM’s across the country.
Skimming involves attaching a small electronic device to the card entry slot of a cash machine to record a card’s details without the cardholder’s knowledge. Criminals are then able to clone the card and use it to withdraw money from a cash machine.
Recently, ‘card skimming’ was on the rise in place such as restaurants as the cards would be out of sight of the customer long enough for it to be skimmed. Chip- and- Pin has seen a reduction in this kind of fraud as the Chip-and –Pin machine is brought to the customer.
As the introduction of the Chip and Pin scheme makes it harder for criminals to commit card fraud, ‘card skimming’ is on the rise as criminals look to other means of committing card fraud.
The first three months of 2006 saw ATM fraud reach £21.4m, a rise of 54% on the same period during the previous year.
Levels of ATM fraud have grown by more than 250% in the past five years. Experts now say skimming accounts for the greatest proportion of cash machine fraud in the UK.
Last month, Tesco announced increased security measures for its 1900 cash machines, at a cost of £3m. Duncan McKinnell, director of operations at Tesco Personal Finance, says: “ATM networks across the country are being increasingly targeted by fraudsters, so £3m is a worthwhile investment to protect our customers’ hard-earned cash.”
Last week saw Sainsbury’s Bank announce it will spend £3.5m on improving security at its 885 ATM’s across the UK. New security measures will include CCTV cameras as well as the latest anti-skimming devices.
Another of the UK’s major banks, Lloyds TSB, is also installing anti-skimming devices at all its cash machines around Scotland.
Matthew Timms, internet and ATM director at Lloyds TSB, says the bank’s move is only one of a number of measures it is taking to help combat fraud: “ We are doing everything we can to ensure that our cash machines are safe to use. ”
A spokesman at Bank of Scotland says that while card skimming is currently on the rise, the introduction last year of a new “Chip and Pin” security system for debit and credit cards should see card fraud fall in the near future.
He says: “ What makes skimming possible is the ease with which it is possible to copy the magnetic strips on the back of customers’ cards. It is currently possible to buy machines through the Internet that allow skimming.
“ But cards with magnetic strips are gradually being phased out and we expect that the growing use of chip-only cards will ensure that copying chips is not possible, because they are encrypted. ”
Alisdair Milton
13th September 2006
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