Report: 10 percent of fraud victims fall victim to bogus ATM withdrawals

Analysts urge financial institutions to implement layered security measures, educate consumers


According to a new report released earlier this month by Javelin Strategy & Research on ATM and PIN fraud, 10 percent of fraud victims in the U.S. experience fraudulent ATM cash withdrawals.

As a result, 23 percent of the 4,874 consumers interviewed for the survey said they left their primary financial institution. Research analysts say that in addition to the use of skimming devices, thieves are now gaining access to customers PINs by manipulating ATM software and by sending out bogus text messages to consumers requesting their personal information.

"Despite the efforts by financial institutions to protect consumers, the number of records breached rose 16 percent in 2009," said Mary Monahan, managing partner and research director for Javelin in a prepared statement. "Fraudsters have become more organized globally and more sophisticated technologically and may increase their attacks on ATMs in the U.S. as neighboring countries such as Canada and Mexico move to EMV chip-cards, which protect against skimming."

Analysts are advising financial firms to not only to implement more layered security measures, but to also educate users on fraud risks and how to avoid them.

For more information about the report, visit www.javelinstrategy.com.