ATM Hacking Rises Rapidly Bad Guys Rush To Cash In Ahead Of Chip-And-PIN Cards

SAN JOSE, CA -- Criminals are targeting automated teller machines at an alarming rate. According to FICO, a 60-year-old credit score company that also monitors bankcard transactions, ATM hacking has reached its highest level since the widespread introduction of the machines 20 years ago.

FICO's estimates of fraud are distressing, to say the least. This year, debit-card swindles at bank-based ATMs soared 174% from Jan. 1 to April 9, compared with the same period last year. While this alone is alarming, the news is worse for nonbank ATMs, also known as off-premise ATMs. These independently operated ATMs saw the number of hacks skyrocket 317% for the same 99-day period.

Thieves typically install false faceplates on a machine to capture card information and use that data to manufacture a fraudulent card. They may also use a miniature camera to capture a PIN as a customer enters it on the ATM keypad or screen.

"This is unprecedented. We've never seen this type of increase before among nonbank ATMs," said FICO spokesman Joe Krakoviak.

According to Krakoviak, the criminal onslaught is due to the impending changeover from standard magnetic-stripe cards to the more secure chip-and-PIN system, or EMV, which is scheduled to roll out in the U.S. this fall.

"If you look at what's going on with the compromises at merchants' points of sale, they are down big time," Krakoviak explained. "It strongly suggests that the bad guys are focusing on this opportunity before it goes away."