ATMs try to fight back against skimming

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ATMs try to fight back against skimming
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ATM operators that don’t accept chip card technology will soon be responsible for any fraud costs should customers fall victim to skimming.

Read more: 4 old-school ways to stay on budget

MasterCard addresses a growing problem

Beginning this Friday (Oct. 21), MasterCard has new network rules regarding ATMs that signals a major change in the industry, according to the Wall Street Journal.

Under the new rules, when a chip-enabled MasterCard is used at an ATM that doesn’t work with chip technology, the liability for fraud costs will be on that ATM operator—not the card-issuing bank.

This move likely won’t impact big banks too much; rather, it should hit those small, independently owned ATMs that you find at corner stores in metro areas.

The banks that own the bulk of our nation’s ATM fleet say they’re already in compliance with the new MasterCard rules. For example, PNC Bank says the 9,000 ATMs it owns and operates already accept chip cards. Ditto for Chase and Bank of America, which have some 34,000 ATMs between them.

Meanwhile, Visa is enacting a similar shift of liability from card-issuing bank to ATM operator that will go in place October of next year.

An attempt to fight skimming

This latest move by MasterCard addresses skimming, which is a growing problem in the ATM industry.

For those who don’t know, skimming involves criminals putting an undetectable card reader device on an ATM. The device then records your card info when you insert it. By getting that info and secretly recording your PIN, the criminals can make a duplicate of your card and drain your bank account.

It’s been a tremendously successful criminal ploy. The rate of ATM fraud skyrocketed by 546% from 2014 to 2015, according to FICO. But MasterCard’s move and Visa’s subsequent move next year should prompt more card issuers to put chip technology into their ATMs cards.

Increased chip technology in ATM cards should go far in fighting fraud. Chip technology works by generating a one-time only transaction code. So with a one-time only code, it’s much more difficult (in theory at least) for criminals to be able to duplicate a working card and have it work again successfully.

Here’s an ATM ripoff of another kind

Speaking of being ripped off, here’s an ATM ripoff of another stripe: ATM fees!

Clark is famous for obsessively remembering the last time he paid an ATM fee: June 1996 in Moab, Utah, to be exact!

It’s been 20 years and he’s still rankling over it. Don’t be like Clark: Avoid ATM fees at all costs…

1. Use your own bank’s ATM. You’re often hit twice to use an ATM as a non-customer: Once by your own bank and once by the institution that owns the foreign ATM. So this one is a basic no-brainer—use your own bank’s ATMs exclusively and you’ll never pay another ATM fee again!

2. Find retail partner ATMs. Many banks will have agreements in place with retailers to be their preferred ATM provider. Wells Fargo ATMs can be found in QT gas stations and Citibank ATMs are in 7-Elevens. Those are just two examples of the many affiliate partnerships out there. Ask your bank who their affiliates are.

3. Get cash back at the register. Many supermarkets will give you up to $200 at the register, fee-free. Ditto for the major pharmacy chains. (This is a great way for stores to reduce cash on hand.) In addition, Sam’s Club allows you to get up to $100 cashback when you check out.

4. Bank with an organization that will eat the fee for you. A couple of examples are USAA and Charles Schwab. They absorb or refund the ATM fee when you use a foreign ATM, up to a set amount. Here’s another idea: Many of the credit unions that have large co-op networks offer free ATMs.

5. Borrow from a friend or family member. Why not just borrow a few bucks rather than pay a hefty fee at an alien ATM? Paypal, Venmo, Square Cash and Google Wallet are all great options for this approach.

Read more: Is that ATM safe to use? Maybe not…

Security warning: Mobile banking hack

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the New York Times #1 bestseller Living Large in Lean Times. As a single widowed parent of two young children, he strives to bring savings tips to that unique subset of individuals. He can be reached at theo@clark.com.
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