Debit Card Fraud at ATMs Rose 10% in 2017

March 6, 2018, Written By Lynn Oldshue

According to a new FICO report released today, debit card fraud at ATMs and merchants increased by 10% in 2017. FICO’s vice president of fraud solutions, TJ Horan, said this set a new record for the industry, and encouraged consumers to check their accounts regularly for fraudulent transactions.

ATMs have always been a prime location for debit card fraud since thieves can install data theft devices with minimal detection.

Before EMV cards, card skimmers were the most common way for hackers to collect data from an ATM. The skimmers would slide over the magnetic strip reader in the machine and copy the data from the strip when a card was inserted.

Now, some fraudsters have moved in to card shimmers. These paper-thin devices go between the chip reader and the card at an ATM or payment terminal. Shimmers cannot replicate data from the chip, but they can collect the associated data on the card’s magnetic strip. Most cards in America are still equipped with magnetic strips, even if they have a smartchip on them.

How to Avoid Debit Card Fraud

No matter how many innovations take place in making cards safer, there will always be hackers that are thinking one step ahead. It is important to do everything possible to protect yourself. FICO has a number of tips that will help reduce your risk of debit card fraud:

  • Run your card as credit instead of debit, when possible. The security measures for credit card transactions are typically stronger than debit card transactions. Also, if your debit card has a cash back offer, running as credit may be the only way to earn cash back. Review your card terms and adjust your spending accordingly.
  • Check your account regularly for suspicious transactions. Some fraudsters will use micro transactions, under $10, to slowly steal money from an account.
  • Set up mobile alerts through your bank so you can be informed of transactions as they occur.
  • Only use ATMs in well-lit, high traffic areas. Fraudsters steer clear of these locations because they are more likely to get caught.
  • Limit the number of accounts attached to your debit card. Ideally, you should only have one checking account associated with the card, not your savings account.

The information contained within this article was accurate as of March 6, 2018. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

About Lynn Oldshue

Lynn Oldshue has written personal finance stories for for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue