Cashpoint fraud hits £61m as thieves target security flaws

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The Independent Online

Cash machine fraud has soared by 85 per cent to £61m during the past year, as Eastern European gangs targeted weak links in security with sophisticated techniques.

Cash machine fraud has soared by 85 per cent to £61m during the past year, as Eastern European gangs targeted weak links in security with sophisticated techniques.

Well-disguised "skimming" devices at cashpoints, which copy card details, allied to miniature cameras to record Pins were the main reason behind the huge rise, the Association of Payment Clearing Services (Apacs) said. The introduction of "chip-and-Pin" debit and credit cards, which should become the majority next year, would, however, stymie the crooks because the skimming system would not be able to pick up the card details.

The skimming devices are tailor-made to match the colour and texture of the machines that are targeted, and fit over the slot where the card goes, recording data from its magnetic strip as the card passes into the machine. The cameras are attached along the top inside edge of the cash machines, and record the keystrokes used with a card.

This method lets gangsters capture many more card details more quickly than with other commonly-used methods, including "shoulder surfing" - where they watch a user enter a Pin and then steal the card - or the "Lebanese loop", which uses a slim plastic loop put into the card slot so that the card is retained.

"Using card skimmers, they can probably get 40 cards in an hour, with far less risk than the other two methods," a spokeswoman for Apacs said. The initial targets for the skimming systems had been popular ATMs in London.

The British Transport Police this week circulated photos of a skimming system that was used at Hammersmith underground station in October on a Barclays cash machine there. A member of London Underground staff at Vauxhall station is understood to have lost a significant amount of money after using a cash machine there which had been tampered with.

"We have 50,000 machines and not all of them have CCTV [to catch criminals fitting fakes] and not all are bank-owned," an Apacs spokeswoman said. "The majority of those which are targeted are owned by banks - they see 97 per cent of transactions.

"They have been targeting machines outside supermarkets, petrol stations, and now we have had reports from the length and breadth of the country - they have moved up the country along the motorway networks."

Banks have not released details on how many people were hit by the crime, nor the average amount lost, or how many cash machines had been used for the crimes. Where customers can show that they have not willingly divulged their Pin to someone else, they are entitled to a refund on any losses.

However, Apacs believes the majority of cash machines are safe, with £144bn of money safely withdrawn in 2003. There are 42 million customers who, between them, own 65.5million cards. By the end of this year, 36 million chip-and-Pin cards will have been issued.

The Apacs spokeswoman said: "Criminals are making extra efforts to target cash machines before chip-and-Pin is fully rolled out. In the meantime we all need to be more vigilant when we use our cards."

Total card fraud rose by 18 per cent to £478.8m in the 12 months to June 2004. Counterfeit card fraud fell by two per cent to £123m; lost and stolen card fraud rose by 11 per cent to £118.8m and identity theft rose 50 per cent to £37m.

The police have set up a special task force to tackle gangs that target cash machines. About one-third of cases involving card fraud are reckoned to be the work of gangs, and at the start of the year they were mainly concentrated in the South-east. The sophistication of the gangs' organisation has even spread abroad, with holidaying Britons finding that their details have been captured in popular holiday spots such as Spain.

The average legal withdrawal from a cash machine is about £60. However, criminals will take out the maximum possible in any 24-hour period, often £300 or more. "They prefer money rather than goods," the spokeswoman said.