The Prague Post
November 22nd, 2008
Endowment Fund     Business Listings ONLINE      Reservations      Classifieds    Subscriptions
Prague accommodation

Home » Archives » Banking & Finance

Easy money

Banks fight back against ATM fraud

By Victor Velek
Staff Writer, The Prague Post
September 12th, 2007 issue

Photo illustration by KURT VINION/The Prague Post
When the first automated teller machine (ATM) appeared in Czechoslovakia in 1989, few were aware of the revolution in banking habits the machine would soon usher in. After all, it was limited to cash withdrawals for Česká spořitelna employees.
Today, the Czech Republic hosts more than 3,000 ATMs facilitating a variety of services. But, as the public has become acclimated to their use, so have thieves, who increasingly target the machines as wellsprings for fraud and theft.
Perhaps the most discrete way to steal credit or debit card data from an ATM is by using card skimming, which swipes this information from the magnetic strip of your card with a well-camouflaged reader installed on the ATM’s card slot.
The number of skimming cases, as well as attempts to pay with fake cards based on stolen data, has soared since 2004, said Pavel Hanták, spokesman for the Police Presidium. However, no statistics concerning the crime are available.
But, looking at broader data sets, “our estimate is that such crimes have tripled [since 2004],” Hanták said. This year, there have been 60 or 70 cases of skimming, he estimated.
Once the data is stolen, scammers create a clone card featuring the copied details, according to police fraud experts. Often the skimmer is accompanied by a small camera that spies on PIN codes as they’re typed.
The sophistication of the crime means no simple thief can easily start his own racket.
“These crimes are committed by organized gangs,” Hanták said.
Equipped with their stolen data, the gangs then tap into their victims’ accounts, either by withdrawing cash from an ATM or buying goods online. The data could also be the first step toward identity theft, allowing criminals to take loans in their victims’ names, for example.
To combat skimming, all of the major domestic banks have installed or are currently installing FDI systems. Raiffeisenbank and ČSOB have had anti-skimming devices on their ATMs since 2006.
Česká spořitelna, boasting the country’s densest ATM network, with more than 1,000 machines, became the most recent bank to introduce new protective measures.
“More than 130 ATMs have been already equipped with a special anti-skimming device, the so-called FDI [Fraudulent Device Inhibitor] system,” said Česká spořitelna spokeswoman Kristýna Havligerová. By the end of this year, the system will be affixed on every machine, she added. Komerční banka and eBanka will join the club by the end of the year.
The FDI is a bright-green illuminated plastic fitting installed horizontally at the entrance of an ATM’s card reader. It prevents skimming devices from being overlaid on the reader and also defends against trapping devices, which retain inserted cards to be later withdrawn by fraudsters.
Adding FDI systems has already curbed skimming attacks, according to Raiffeisenbank and ČSOB. Neither bank has recorded an attempt to skim their clients’ cards this year, while Česká spořitelna and eBanka have been targeted multiple times.
Cops and robbers
Apart from card skimming or its more indirect form, phishing, which attempts to get account details through fake e-mails sourced to banks, ATM users face other less sophisticated — but no less serious — dangers, as the machines have become frequent targets of theft and robbery.
“This type of crime had been negligible up to 2005, [but] from that year on, it’s been on the rise,” said Zdeněk Zelenka from the police press department.
ATM burglars either try to break into the machine and steal money or steal the whole machine, later extracting its cash far from public attention.
This year, the number of ATM attacks has skyrocketed. From January to August, the police investigated 69 cases of ATM robberies, compared with 18 for the whole 2006, according to Zelenka.
The number of ATM thefts has also risen. In 2006, there were 18 ATMs stolen, while in the first eight months of this year, banks have seen 23 machines disappear. “Most of these stolen machines are later found stripped of cash,” Zelenka said.
Not content with ATMs, thieves still go to the source: detectives are investigating 94 robberies of financial institution so far this year, slightly more than in the same period of 2006, Zelenka said.
Until 2003, the country witnessed fewer than 70 such robberies a year. In 2004, the number soared to 176 and has remained around that figure ever since. In the past seven years, fewer than half of these crimes have been solved, according to police statistics.

Victor Velek can be reached at vvelek@praguepost.com


Other articles in Banking & Finance (12/09/2007):

Browse the Current Issue

If you enjoyed this article, why don't you subscribe to the print version!
We accept secure online transactions provided by PayPal and Moneybookers

Be the first to add a comment!


Full Name: *
City: *
E-mail: **
This comment can be published in the print version of The Prague Post
Enter the text on the right:
 visual captcha
Comment: *
* Required field. In order to be approved for display, comments must have a first and last name and a city.
** E-mails are required and will only be used for internal purposes.

Most visited in Business Listings

Hotel booking
The Prague Post Online contains a selection of articles that have been printed in
The Prague Post, a weekly newspaper published in the Czech Republic.
To subscribe to the print paper, click here.
Unauthorized reproduction is strictly prohibited.