How To Avoid ATM Fraud While Traveling

How To Avoid ATM Fraud While Traveling

22

When I travel abroad, I always get cash by visiting a local ATM. Yes, you might pay a fee of a couple of dollars (though in some cases banks even reimburse clients for those fees), but at least you’re getting the fair exchange rate. I far prefer this to bringing a bunch of cash from the US, since you’ll typically get a bad exchange rate when converting it, not to mention there’s the added risk of traveling with extra cash.

I still do everything I can to pay by credit card and minimize how much cash I have, since I’d always rather earn points. 😉 Fortunately credit card acceptance is becoming more widespread globally.

All that being said, I know there are risks to using ATMs as well, as some thieves manage to steal ATM card details. One thing I never understood is how the process works. At least up until now.

Here’s how thieves steal ATM card details

A friend forwarded me a link to a story on trustfoundry.net about ATM skimmers. These are basically devices which record your card information by installing an external device on the ATM machine. In order for someone to take advantage of your ATM card in a useful way, they need both the card number, as well as the PIN.

According to the article, this is often done using two devices:

  • A skimmer in the card slot, which records your card information
  • But they also need your PIN, so there’s typically either a hidden camera (which records you typing the code) or a PIN pad overlay (basically a pad which is placed on top of the normal PIN pad, so that both pads can record your PIN)

For example, here are a couple of short video which show card skimmers being installed:

https://www.youtube.com/watch?v=y83ZgzuFBSE

Here’s what you can do to protect yourself

Here are the suggestions to be sure you don’t fall for ATM fraud:

  • Give the card reader, the keypad, and the privacy shield which covers the keypad a good yank — skimmers typically snap into place or are attached with adhesive, so you should be able to easily tell if something isn’t right
  • Make sure the card goes in smooth — if you enter the card into the slot and it doesn’t go in smooth, something isn’t right, and an external device may be installed
  • Cover your PIN with your hand — this is in case there are any cameras installed, though it’s not a sure bet, since there could be a PIN pad overlay, or the camera could be installed just inches from the keypad

The entire original story is worth a read, as the author deals with an ATM in Bali where the PIN cover snaps right off. As it turned out, it had a camera installed, so that they could watch you enter your PIN closely, in addition to the card skimmer. He then reverse engineered the skimmer. While I’m not a tech guy, I still found it interesting.

Bottom line

I’m generally not a paranoid traveler. For example, I’ve long known that ATM fraud is a thing, but never bothered looking into how it works, especially given the protection banks provide. I’ve often found myself at ATMs which seem shady and where I ask myself whether something is a bit off. Now I at least know the way to spot the most common type of ATM fraud.

I’ll be trying the above tricks from hereon out, more out of curiosity than anything else. I’ll be covering my PIN as I enter it, and will also give a good pull on the card reader slot, the keypad, and the keypad cover.

Have you ever faced ATM fraud?

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  1. chancer

    @ Tom - The max $50 liability DOES NOT APPLY TO DEBIT CARDS. Sure, the bank will immediately credit your account the amount that was stolen, but if it later decides it could have been the customer who withdrew the missing funds, you are SOL. Your bank may not do this, but there are plenty that will make the customer eat the loss if they can.

  2. Julie

    Ha! This just happened to us in Florence, Italy. Took them a week to make a card and then they used it for 5 days straight withdrawing €250 3 times in a row within 2 minutes around the same time every day at the same Bank (not branch but Bank). Didn't discover it for 5 days, $2800 +/- was gone. Citibank cancelled the card immediately and we got all of our money back. Will get a Travelex card for cash next time....

  3. Grant

    This happened to me twice in the past two years. The first time was at the outdoor mall in Cancun (the only bank of ATM's right by the Movie Theater. Ironically, a cop was right in front of me getting money out. I wonder if he got scammed too.

    The second time was at the Rio de Janeiro airport last summer. I tried my card on multiple ATM's and nothing worked (several in the...

    This happened to me twice in the past two years. The first time was at the outdoor mall in Cancun (the only bank of ATM's right by the Movie Theater. Ironically, a cop was right in front of me getting money out. I wonder if he got scammed too.

    The second time was at the Rio de Janeiro airport last summer. I tried my card on multiple ATM's and nothing worked (several in the bank at the airport). I finally got my wife's to work (first time I've ever had so much trouble using an ATM overseas). Once I got to the Marriott and on the wifi, I got an email alert that there were two transactions on my account, one of them being a fraud. There was another one an hour later. I had to explain to the lady that I wasn't about to go back to the Rio airport after checking into my hotel just to get more money out of the ATM.

    Anyways, having two separate atm cards really saved us there.

  4. 02nz

    Not technically fraud but on a related note travelers making cash withdrawals abroad should watch out for the increasingly common practice where you are offered a choice to have the conversion to US dollars done by the local bank rather than your own (the cash you get is still local currency). This is similar to what many merchants (esp. in heavily touristed areas) do with credit cards. The markup is very high - just yesterday...

    Not technically fraud but on a related note travelers making cash withdrawals abroad should watch out for the increasingly common practice where you are offered a choice to have the conversion to US dollars done by the local bank rather than your own (the cash you get is still local currency). This is similar to what many merchants (esp. in heavily touristed areas) do with credit cards. The markup is very high - just yesterday I made a withdrawal in Prague, and by declining I saved 10 percent, comparing what my bank actually converted to what I would have gotten had I opted to convert to US dollars at the terminal.

  5. tim

    you CAN'T avoid ATM skimmers/scammers. Many are embedded into the machine (negating any need for a camera to watch you entering a PIN) because ATM service techs can be bribed....

    have a look at a report from one of the best security research bloggers. He found them in nearly every ATM on a vacation/research trip to a tourist area of Mexico

    http://krebsonsecurity.com/2015/09/tracking-a-bluetooth-skimmer-gang-in-mexico/

  6. Tom

    @robertw. I stand corrected given all of the first hand experience described here. I still think that asking customers to be vigilant is asking the customer to do the bank's job. If a bank allows its ATM to be skimmed, they should be liable for all damages. I think US law is on the consumer's side here too.

  7. askmrlee

    Here's some practical advice you likely won't find elsewhere:

    1) Use a plain ATM card (not a debit card with a Visa or Mastercard logo). Requires PIN to use and cannot be used for online transactions if the card is stolen. You may have to ask your bank for one as they typically issue debit cards by default.

    2) Use a debit card and get a "cash advance" inside a bank from a...

    Here's some practical advice you likely won't find elsewhere:

    1) Use a plain ATM card (not a debit card with a Visa or Mastercard logo). Requires PIN to use and cannot be used for online transactions if the card is stolen. You may have to ask your bank for one as they typically issue debit cards by default.

    2) Use a debit card and get a "cash advance" inside a bank from a teller. Be sure you go to a real bank, not a Travelex type bureau de change counter. You typically have much larger transaction limit vs the cash withdrawal limit. Check for separate fees of course for this method. I've taken my Capital One 360 and brokerage debit card and performed this at a Chase branch when I needed more cash then the ATM limit. No fee from either Chase or the issuing banks in this case.

    3) Use the suspend feature of your card if available. CapitalOne 360 allows you to turn on /off access to the debit card on demand. Turn on, make your withdrawal, then turn off.

    4) Avoid Triton, Transax and Trident ATMs as these are the ones used to demo ATM insecurity at hacker events like BlackHat in Las Vegas. These are the ones you typically find at independent gas stations and convenience stores.
    .

  8. robertw

    I got caught by a skimmer several years ago in Rome. I didnt know the problem until I was in London a few days later and my card didnt work. The ATM was right outside the bank and it was a bank holiday. In any case my bank covered any charges. It was possible that there was an inside man at the bank for all I know. I contacted US consulate about it also. Yukon...

    I got caught by a skimmer several years ago in Rome. I didnt know the problem until I was in London a few days later and my card didnt work. The ATM was right outside the bank and it was a bank holiday. In any case my bank covered any charges. It was possible that there was an inside man at the bank for all I know. I contacted US consulate about it also. Yukon I had no issues in China and tried to use some closely monitored ATMS. I have been there three times in the past year including last week. MAinland China and Hong Kong as well. Plenty of them inside guarded area. Tom asks how common is this? Common enough if you ask me. Especially in certain countries and or areas. Also Fidelity charges zero ATM fees overseas if anyone cares. No conversion fees either.

  9. Erica

    Very informative and helpful. Thanks so much Lucky!

  10. Donna

    I only use bank ATMs and I carry multiple cards and I monitor transactions on my laptop daily just to make sure nothing has been compromised. I do fear the scenario above where the machine doesn't return the card but so far it hasn't happened to me. I carry multiple cards.

  11. Robert Hanson

    It's absolutely necessary to carry at least 2 ATM cards, from different banks, when traveling. I once had an ATM fail to return my card, and since the bank where it was located was closed, I had to wait until the next day to retrieve it. Another time the ATM mangled my card beyond use.

    It's also happened that I couldn't access my account because the bank's system, on a different time zone than...

    It's absolutely necessary to carry at least 2 ATM cards, from different banks, when traveling. I once had an ATM fail to return my card, and since the bank where it was located was closed, I had to wait until the next day to retrieve it. Another time the ATM mangled my card beyond use.

    It's also happened that I couldn't access my account because the bank's system, on a different time zone than my location, was down for maintenance. And a couple of times my bank thought there was suspicious activity on my card, and blocked it's use. Always carry at least 2 different cards.

    As for NB's comment about Revolut, I have no personal knowledge, but Wikipedia has this:

    "In February 2016, Revolut introduced a Fair Usage policy, limiting free ATM withdrawals to the equivalent of GBP £500 per calendar month (2% fee above £500), imposing a 3% fee for debit card top-ups in USD, and no longer providing the interbank rate for illiquid currencies such as the Russian Rouble or the Thai Baht."

  12. brian Kusler

    This has happened to my husband and I three separate times in the past 10 years: once in France, once in Mexico, and once in San Francisco. More than anything it's just super annoying to take a nice vacation and blow AT LEAST half a day of it making calls to your bank in another time zone, canceling your card, ordering a replacement card, filling out forms, identifying the fraud from the real charges, and...

    This has happened to my husband and I three separate times in the past 10 years: once in France, once in Mexico, and once in San Francisco. More than anything it's just super annoying to take a nice vacation and blow AT LEAST half a day of it making calls to your bank in another time zone, canceling your card, ordering a replacement card, filling out forms, identifying the fraud from the real charges, and then finding some way to get access to local currency cash in the meantime.

    Once you factor everything in, vacations easily cost north of $50 per waking hour, so in my mind, even if I don't lose an actual penny from my bank account, they've robbed me of at least $600 worth of time.

  13. Yukon

    Hi Lucky,
    I have always used atm's when I travel but I was told not to do so in China, and instead to bring cash--preferably new bills. Do you think that's a bunch of hooey?

  14. Bill

    I never use atms that are not located inside a bank, even then im on the lookout for something like this. You are really just asking to be ripped off otherwise. Why risk it especially given the hassle if you are in a foreign country and something goes wrong with your access to travel funds.

  15. Rico

    It must be a thing. Many different ATMs from different banks in Vietnam had warnings in English about this. Some even played a video on how to check the card reader slot before the normal ATM screen.

  16. Ken Berry

    I had this happen in Puerto Vallarta in January. Like others, I use a 'travel checking' account. Keep a low balance. Keep the debit card in the room unless I am going to the ATM. (Carry and use credit cards for everything else.)

    After using the same ATM in a convenience store three times over the course of a weekend, I found fradulent withdrawals in Guadalajara a few days after returning home. Seems I...

    I had this happen in Puerto Vallarta in January. Like others, I use a 'travel checking' account. Keep a low balance. Keep the debit card in the room unless I am going to the ATM. (Carry and use credit cards for everything else.)

    After using the same ATM in a convenience store three times over the course of a weekend, I found fradulent withdrawals in Guadalajara a few days after returning home. Seems I had overdraft protection turned on for that account, so they were able to keep pulling out around $200 at a time from various ATMs. Doh!

    So yes, it does happen. In the future, I'll be using only bank ATMs whenever possible.

  17. Tom

    How common is this really? I know it makes the news occasionally when they catch perpetrators, but is it really that common? I feel like the people giving advice above to only use ATMs inside banks and not at bars or convenience stores are paranoid. They are similar to people who give advice about how to best survive a plane crash by choosing the right seat and wearing appropriate gear. It may improve your chances...

    How common is this really? I know it makes the news occasionally when they catch perpetrators, but is it really that common? I feel like the people giving advice above to only use ATMs inside banks and not at bars or convenience stores are paranoid. They are similar to people who give advice about how to best survive a plane crash by choosing the right seat and wearing appropriate gear. It may improve your chances if something happens, but the initial risk is infinitesimally small.

    Also, if this does happen to you, isn't your liability limited to something small like $50 if you report on time? As with credit card fraud, it seems like banks have much more to lose than consumers with these scams.

    My personal advice, when you travel, you should have at least two ATM cards and two credit cards. You should leave one of each at the hotel or at the very least outside of your wallet (one in wallet, one in luggage/backpack). This way if you get robbed (or your ATM card gets hacked), you can just switch to your backup for the rest of the trip.

  18. NB

    I use a Revolut card. Any transaction turns up instantaneously on my phone, so I would know the first time it is used fraudulently. Also, Revolut give much better exchange rates than the card issuers.

  19. Eugene

    If you have any technical questions, it's alright to ask away here. Some of your readers are engineers and computer science majors too!

  20. Ricky

    I never use an ATM in a store or non-bank setting. Always go to a bank. I also prefer ATMs which are inside the bank rather than open to the street. It obviously won't prevent skimming but it's more secure than using an ATM at a convenience store. I also check my balance every day (as long as l have an internet connection), regardless of where l am (at home or traveling) or what I'm doing.

  21. Chris

    When I am traveling, I opened a separate checking account that I maintain a small balance for travel needs and it uses a different ATM card than my main checking account. I leave my main checking account ATM card at home and carry only my small balance checking account ATM card so if someone steals the info, they only have access to that small amount of money.

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chancer

@ Tom - The max $50 liability DOES NOT APPLY TO DEBIT CARDS. Sure, the bank will immediately credit your account the amount that was stolen, but if it later decides it could have been the customer who withdrew the missing funds, you are SOL. Your bank may not do this, but there are plenty that will make the customer eat the loss if they can.

Julie

Ha! This just happened to us in Florence, Italy. Took them a week to make a card and then they used it for 5 days straight withdrawing €250 3 times in a row within 2 minutes around the same time every day at the same Bank (not branch but Bank). Didn't discover it for 5 days, $2800 +/- was gone. Citibank cancelled the card immediately and we got all of our money back. Will get a Travelex card for cash next time....

Grant

This happened to me twice in the past two years. The first time was at the outdoor mall in Cancun (the only bank of ATM's right by the Movie Theater. Ironically, a cop was right in front of me getting money out. I wonder if he got scammed too. The second time was at the Rio de Janeiro airport last summer. I tried my card on multiple ATM's and nothing worked (several in the bank at the airport). I finally got my wife's to work (first time I've ever had so much trouble using an ATM overseas). Once I got to the Marriott and on the wifi, I got an email alert that there were two transactions on my account, one of them being a fraud. There was another one an hour later. I had to explain to the lady that I wasn't about to go back to the Rio airport after checking into my hotel just to get more money out of the ATM. Anyways, having two separate atm cards really saved us there.

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