ATM skimming: What it is and how to protect yourself

There is good reason to be concerned about the safety of card transactions. In the UK alone there are 134 attempts at card fraud per 1,000 people, according to a study by the Social Market Foundation.¹

What is ATM skimming?

ATM skimming is a form of theft where criminals rig ATM card readers to read the magnetic stripe on cards and record PIN codes. Card skimming equipment is placed on point-of-sale (POS) terminals or other card readers to capture data.

Additionally, fraudsters may install cameras on ATM machines to monitor users entering their PINs or to disguise a skimming device. In some cases, these tampered ATMs can cause a card to be stuck in an ATM. These actions are widely used by fraudsters and are often difficult to spot.

ATM skimming methods

There are several ways to rig an ATM to steal card information. Some of the most common skimming methods include:

• Plastic overlay. Skimmers place a plastic overlay over the card slot, which captures card details as a card is inserted.

• Card reader overlay. This device is placed over the original card reader, allowing criminals to copy magnetic stripe data.

• Tiny cameras. Skimmers attach small cameras near the keypad to record users entering their PIN.

• Card trap devices. These devices trap the card and prevent the ATM from returning it. Users are forced to leave without it, giving criminals access to both the card and the information stored on it.

Each method is designed to look inconspicuous, making it important to stay vigilant when using ATMs.

Tips on how to avoid ATM skimming

It is wise to adopt a series of best practices to stay safe from ATM skimming.

How to choose a safe ATM

Using ATMs located inside banks or in well-monitored areas significantly decreases the likelihood of encountering machines with skimming devices. Bank-affiliated ATMs are regularly inspected for any signs of tampering, enhancing ATM security and making them safer choices. Additionally, opting for ATMs equipped with anti-skimming technology can further deter fraudsters.

Inspect the chosen ATM

It's important to know how to check for ATM skimming devices as identifying card skimming equipment early can help prevent fraud. Look for loose or misaligned parts around the card reader or keypad, as this could indicate the presence of a skimming device. Also, be aware of any hidden cameras that may have been placed to record PIN entries.

Use cardless ATMs

At cardless ATMs, consumers can withdraw cash without needing to insert a physical card, removing the risk of skimming card fraud. These machines work by using a mobile app or a code sent to the user’s phone, eliminating the need for a card. Since no physical card is involved, skimming devices cannot capture card data, making this a good option for withdrawing cash.

Here’s how cardless ATMs work:

1. Access the mobile banking app or PayPal's digital wallet and choose the cardless ATM withdrawal option.
2. Enter the desired withdrawal amount and receive a unique code or QR code.
3. At the ATM, enter the code or scan the QR code to complete the withdrawal.

Cover the PIN

Always cover the keypad with one hand or your body while entering the PIN. This simple habit helps block any hidden cameras from recording the PIN. Even if the ATM appears safe, it’s always best to shield the keypad from prying eyes or cameras.

Monitor bank accounts regularly

This is essential. Regular transaction monitoring of a bank account activity is important for catching any suspicious transactions early. Setting up account alerts to receive real-time notifications for all transactions allows immediate action if any financial fraud is detected.

Additionally, enabling extra security measures such as two-factor authentication or biometric authentication adds another layer of protection. These features make it hard for fraudsters to access accounts, even if they manage to skim card details.

Use cards with chip technology

Newer chip cards provide a higher level of security compared to older magnetic stripe cards. Bank cards with chips generate a unique code for each transaction, making it more difficult for criminals to duplicate the information. Magnetic stripe cards store data on the stripe itself, which can be easily copied using a skimming device.

Checkout safely with PayPal’s digital wallet

Using PayPal’s digital wallet helps secure payments, eliminating the need for physical cards and ATMs, which are vulnerable to skimming.

The digital wallet offers extra layers of protection such as PayPal's advanced encryption, 24/7 fraud monitoring, and two-factor authentication.

How to checkout with PayPal:

1. Add bank accounts or cards to a digital wallet.
2. When making a purchase, choose to checkout with PayPal as the payment method.
3. Pick the preferred payment source (bank account, credit card, or PayPal balance).