Over the last several decades, automated teller machines (ATMs) have become commonplace, from bank lobbies to shopping centers to gas stations. As of 2022, there are more than 2.2 million ATMs around the world. As a result of their ubiquity, people casually use these virtual cash dispensers without a second thought. The notion that something could go wrong never crosses their minds.

Unfortunately, things are not always as they seem at the ATM. Most ATM scams involve criminal theft of debit card numbers and personal identification numbers (PINs) from innocent users of these machines. There are several variations of this confidence scheme, but all involve the unknowing cooperation of the cardholders themselves. Let's explore some common ways people get ripped off at ATMs. 

1. Every Little Thing It Does Is Magic

One common scheme begins when a bank customer swipes their debit card in the device that opens the door to the ATM vestibule typically found in a bank's inner doorway. Because most people are unaware of precisely what this magnetic reader should look like, criminals can place a counterfeit device that reads and copies card numbers on the outside door without being detected by customers.

Once the customer is inside, a hidden surveillance camera records PINs as customers enter them on the ATM keyboard. The result of this information gathering is the illegal creation of a duplicate card that thieves quickly use to withdraw all the funds in the connected bank accounts as quickly as possible. Detection of this particular fraud is difficult for the average consumer as there are several dozen manufacturers of legitimate swiping devices. Attempting to distinguish a real one from a fake is almost impossible.

Tips to Prevent/Avoid This Scam

To avoid this scam, you should adopt vigilant practices whenever you use an ATM. This includes visually inspecting the ATM for any abnormalities, covering the keypad while entering the PIN, and using ATMs in well-lit and secure locations. You should regularly monitor your bank statements for unauthorized transactions and enable transaction alert notifications so you can be alerted to detect suspicious activity when it happens. You can also choose ATMs affiliated with reputable banks that may monitor their own ATMs and use contactless payment methods when possible.

2. Don't Stand So Close to Me

Another method of trickery involves the attachment of a false façade over the ATM machine. Though the machine looks normal, in reality, the attachment will "eat" your card and display an error message. Your PIN is usually recorded by a hidden camera, or in some cases, by a "helpful" person standing nearby who suggests that you try to enter your PIN again. Of course, this person is actually a criminal, and moments after you leave, they will retrieve your card from the false front of the ATM and walk away with both your card and the access code.

Other times, an overlay will "skim" the card without destroying it, collecting its information along with the pin code and other data you may enter. For the user, it appears to be a normal transaction, but the thieves now have your card number. In 2021, for instance, the FBI identified an ATM skimming fraud of almost $600,000 throughout the Midwest.

Tips to Avoid/Prevent This Scam

To prevent falling victim to this cam, carefully inspect the ATM for any irregularities, loose parts, or unusual attachments before inserting your card. If the machine or surrounding area looks suspicious or displays an error message after inserting the card, do not re-enter your PIN and report it to the bank immediately. You should also be wary of any person nearby offering help as they may be accomplices to the scam.

3. Ghosts in the Machines

Freestanding ATMs are also subject to criminal activity. These devices are located in areas as varied as airport terminals and self-service gasoline pumps. In some situations, criminal hackers are able to capture account information by using WiFi scanners and cracking programs to download transaction data when the systems fail to be protected by high-level encryption software. 

The most audacious of ATM scams is the installation of machines whose only purpose is to steal information. This criminal confidence scheme was once a popular activity of organized crime circles. Seemingly normal ATMs would be placed in small shops, bars, and other venues. The machines were never actually loaded with funds, but instead were there solely to entice users to swipe their cards and enter their PINs. After collecting this information, an error message would appear. These seemingly innocent devices provided criminals with a steady flow of stolen banking information. Because of their placement in high-traffic areas, users did not realize that all users were unsuccessful at withdrawing funds.

Tips to Avoid/Prevent This Scam

When using such ATMs, especially those in high-traffic areas like airport terminals or self-service gasoline pumps, avoid using machines that appear suspicious. It can be tricky, but see if you can tell if the ATM is equipped with high-level encryption software to protect against WiFi scanners and hacking attempts by criminal hackers. If an ATM appears to be malfunctioning or displays an error message after a transaction (or is having any sort of software issue), refrain from using it and report the issue to the ATM owner.

4. Making the Best of What's Around

An old-fashioned scam that still reaps profits for criminals is the placement of a deposit receptacle in an ATM vestibule with a sign over the automated machine stating it is out of order. Here, the scammer's goal is to capture cash deposits that were intended for the more secure electronic banking machine. While it may seem obvious that depositing money in this unsecured fashion is a bad idea, the comfort, and trust that people have when entering a financial institution often allows them to suspend their suspicions as they believe that there is no safer place than a bank.

Tips to Avoid/Prevent This Scam

In addition to a lot of the advice above, confirm with bank staff or official channels to ensure the ATM is functioning properly. Avoid depositing cash in unsecured or suspicious locations, opting for well-maintained and secure deposit options you've confirmed with your bank. If you come across an ATM marked as "out of order," report it to the bank immediately and refrain from making any transactions.

5. Demolition Men

Finally, criminals who are too impatient to go through the complex process of stealing bank accounts and personal identification numbers will simply steal an entire ATM. Typically, this crime occurs in the overnight hours inside a business, such as a supermarket. The thieves will break-in, use the store's forklift (which is normally used for the benign purpose of moving cases of beer and soda) to rip the ATM off the floor and load it onto a waiting truck. As a fully loaded ATM can hold tens of thousands of dollars, these have become prime targets.

Tips to Avoid/Prevent This Scam

This one can be tricky, but you can still take steps to protect yourself. Like the other tips above, ensure the ATM is located in a well-lit and secure area, preferably with surveillance cameras. Inspect ATMs to make sure whether they are affixed to a wall or the ground (or at least that it may be difficult to move). If you do see suspicious activity such as someone scoping out how to move it, report it to the property authorities.

The Bottom Line

Don't let a simple transaction like withdrawing money from an ATM be a way for thieves to get the best of you. To avoid scams like these, listen to the cautionary voices in your head and be careful when something seems amiss. Even in what seems like normal circumstances, shield the keyboard with your other hand when entering your PIN—it's no fun to be driven to tears by a crime you could have prevented. And of course, if you spot a scam in action, don't apprehend the criminals yourself—let the police deal with that.