Risk alert: Fraudsters again using ATMs to steal cash

The latest risk alert from TruStage warns that fraudsters are again targeting ATMs to steal cash in a method that involves tricking the ATM during the transaction by jamming the ATM card reader and causing a system error code resulting in a transaction reversal; however, the fraudster is still able to remove the cash.

ATMs with motorized card readers are being targeted using counterfeit, stolen and prepaid debit cards. Credit unions have experienced cash losses and physical damage because of transaction reversal fraud (TRF).

TRF became popular in 2019 and is only applicable to the ATMs that support motorized cards and with an application configured for “card before cash.”

Real-time transactions can assist in stopping TRF before major damage is done, according to the risk alert. Additional risk mitigation actions credit unions should consider include:

  • ensuring updates to operating software and patches are applied in a timely manner;
  • working with your ATM vendor to determine which settings are currently in place for error codes and how they respond;
  • checking with your ATM vendor to determine if anti-transaction reversal fraud modifications are available.
  • working with your ATM provider to upgrade your equipment if your ATM has a motorized card reader;
  • completing your ATM inspections daily, looking for damage to the card reader and cash dispenser; and
  • immediately flagging reversal transactions, especially those that exceed withdrawal limits/velocity thresholds.

TruStage risk alerts, in addition to additional risk-prevention resources, may be accessed in their Protection Resource Center. Log-in is required.

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