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Hacked ATMs Lead to 70% Rise in Debit Card Fraud

Blog: Enterprise Decision Management Blog

ATM with Hacked stamp

The latest fraud news from the FICO® Card Alert Service, which monitors hundreds of thousands of ATMs and other readers in the US, is bad. In fact, it’s doubly bad:

Here’s some more details: About 60% of the compromises were at non-bank ATMs, such as those in convenience stores. The rest took place at bank ATMs or point-of-sale (POS) devices, such as card payment machines at retailers.

The average duration of a compromise continued to fall — on average, an ATM or POS device would be compromised for 11 days, compared to 14 days in 2015. The 2016 average duration is less than a third of the average duration in 2014, 36 days. The average number of cards affected by a single compromise was cut in half.

What’s behind this startling rise, which is a new record high? Better skimming devices in more people’s hands. If you really want to hack an ATM, you can get your hands on the tech pretty easily. That means we’ll continue to see compromises – and card fraud – rise.

I’ve been asked whether EMV transition is playing a role here. I think it is, but not the role you’d expect.

As ATMs aren’t yet required to be chip-card enabled, the EMV adoption that came into force last year isn’t driving fraud down yet. Instead, we may be confusing consumers — we tell them not to use machines that look funny or have tape on them, and then the cashier tells them to use a POS device that looks funny and has tape on it. You know, machines that look like this:

Card machine with tape covering chip slot

That said, if you are looking for tips for your customers, here’s FICO’s advice:

We’ll keep an eye on the ATM situation and give another report mid-year. Follow me on Twitter @fraudbird.

The post Hacked ATMs Lead to 70% Rise in Debit Card Fraud appeared first on FICO.

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