Warning over upsurge in cash card skimming

The Irish Payment Services Organisation has reported an upsurge in "cash-card skimming", which is costing European banks €70 million a year.

Cash-card skimming involves copying cash cards used by unsuspecting customers when they take cash from automated teller machines (ATMs). In an eight-month period last year banks across Europe reported losses of €46 million.

The anti-fraud watchdog issued a warning yesterday to cardholders to be extra vigilant when using ATMs, following the discovery of a small number of skimming devices at machines around the country.

According to spokeswoman Jenny Chamberlain, gangs behind the operation move rapidly from town to town, making it difficult for financial institutions to pinpoint their activities and warn customers in individual centres.

The high-technology fraud involves a device being inserted into the ATM which can copy a card's electronic "identity" located in the black magnetic strip.

A camera, which may be tiny and attached to the side of the ATM or even located several metres away, is then used to record the customer's pin number. Armed with the pin number and the electronic identity, customers' cards can be duplicated and most of them used at any machine around the world to withdraw cash.

Ms Chamberlain confirmed that, "where the customer can prove they have not been negligent with their pin number", the banks will carry the loss.

To date all customers who have had money taken from their accounts by fraudsters have been refunded by the banks.

In reality, she said, the banks would always know where a suspicious transaction would likely be fraud. Indicators include the number and location of withdrawals and the number of customers affected.

Ms Chamberlain said the problem was a serious and growing one for Irish banks, and in one week a bank had lost €50,000 from customer accounts.

The Payment Services Organisation has asked customers who believe there may be a device attached to the ATM they are using to cancel their transaction and report the matter as soon as possible to the gardaí.

Items to look out for are adhesive patches around the part of the machine where the card goes in, or loose and shaky fittings.