New ACCA USA Report: Skimmer Scams, Where Street Crime Meets Tech Crime
-Report highlights myriad ways skimmer scams are pickpocketing consumers at the gas pump and ATM-
NEW YORK--(BUSINESS WIRE)--A new report by ACCA USA, the US arm of the Association of Chartered Certified Accountants, and Pace University, details how skimmer fraud has proliferated across the globe, ripping off consumers everywhere from the gas pump to the ATM.
“This is a war being fought at the ATM and the gas pump, at the intersection of street crime and tech crime”
“Skimmer fraud is a huge problem in the United States and worldwide. While skimmers have existed for many years and they have advanced quite considerably over time,” said report author Pace University Professor Darren Hayes, DPS. “Without significant steps being taken to combat this activity, it’s clear this type of fraud will continue to escalate.”
“This is a war being fought at the ATM and the gas pump, at the intersection of street crime and tech crime,” said Warner Johnston, Head of ACCA USA. “As criminals become more sophisticated, they are devising creative ways to separate consumers from their cash.”
The report illustrates how skimmer scams are spreading globally. The Aite Group reported that in 2011 the average loss from skimming crime $50,000, up by $20,000 from 2010. The U.S. ranked number one in the world in financial losses associated with skimming fraud in the first half of 2011.
In January, Manhattan District Attorney Cy Vance, Jr. announced the indictment of 13 persons charged with operating a multi-million dollar fraud ring employing Bluetooth-enabled skimmers at gas stations. The devices connected directly to a pump’s power supply, equipped with a Bluetooth chip allowing thieves to lift stolen data wirelessly.
A skimmer is an electronic device used to read and store electronic data. The new research focused on devices that read and recorded data from consumer payment cards, such as ATM, credit, debit, prepaid and electronic gift cards. Such criminal enterprises use overlay devices (Automated Teller Machine, Gas Station Pump and Ticket Vending Machine Skimmers), parasite devices (Point-Of-Sale Terminal Skimmers), and handheld skimmers (Restaurant/Retailer Skimmers).
The report notes:
- One of the most common types of skimmer is the ATM skimmer, used to record data contained on the magnetic strip on the back of an ATM card. A skimmer may be placed on a stand-alone ATM, such as one at a convenience store.
- Security standards with European credit, debit and ATM cards differ from standards in the U.S., rendering it easier to conduct skimmer fraud in the U.S.
- The U.S. is pivotal for criminal gangs because it has more ATMs than another country and because it is not EMV-compliant (cards do not contain a global chip) and its EMV cards skimmed can easily be cloned. Cards that are cloned by criminals are also used in other non-EMV countries, such as Ghana, Costa Rica, Mexico and Malta.
- Handheld skimmers are not an issue in other countries as much as in the U.S. For example, at U.S. restaurants, a waiter takes a credit or debit card and later with a receipt. At European restaurants, a card remains in sight at all times, and a waiter brings a terminal to the table.
- Equipment used in various types of skimming operations is readily available from online sites such as amazon.com and spy stores.
The report offered remedies. Financial institutions should speed up the integration of anti-skimming solutions and fraud investigations into their daily operations and improve cooperation with national and international law enforcement to keep up with the increased sophistication and global nature of skimmer schemes. The future of ATM transactions lies in contactless cards, biometric security, and smartphone withdrawals instead of traditional ATM cards.
About ACCA: ACCA is the global body for professional accountants with 162,000 members and 428,000 students in 170 countries worldwide. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We work through a network of 89 offices and centers and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development.
About Pace University: Since 1906, Pace University has educated thinking professionals by providing high quality education for the professions on a firm base of liberal learning amid the advantages of the New York metropolitan area. A private university, Pace has campuses in New York City and Westchester County, New York, enrolling nearly 13,000 students in bachelor’s, master’s, and doctoral programs in its Dyson College of Arts and Sciences, Lubin School of Business, College of Health Professions, School of Education, School of Law, and Seidenberg School of Computer Science and Information Systems.