New ATM Scam Allows Unlimited Withdrawals
Jackie here. I take comfort in knowing that my ATM has a daily withdrawal limit. I feel secure knowing that should my account become compromised, only a few hundred could be taken (while this is still a lot of money, it is much better than the alternative of having the entire account drained). A scary new development in ATM hacking allows scammers to change limits, making unlimited withdrawals.
This scam is often used over holiday weekends when the banks place extra money in their ATMs. With no caps, scammers take nearly unlimited amounts from accounts, often withdrawing much more than the accounts actually contain. One recent attack took $40 million from just 12 accounts.
While this is scary news, you can take some comfort in the fact that the losses from the stolen money are covered by various banking laws and insurance programs. You will be reimbursed for the lost money eventually, although it may take some time. Prepaid debit cards do not have the same protections which can lead to consumer losses in cases of theft—it may be best to avoid prepaid cards for everyday use.
How Does it Work?
This scam requires several different attacks to banking systems to gain the necessary information to execute the attack. Typically scammers obtain login credentials to banking software systems using phishing or malware attacks. Once the scammers can log in to banking systems to lift limits, they use fake debit cards made using numbers they’ve obtained through other attacks. The scammers then use these fake cards to clean out ATMs, typically over weekends or holidays.
What Can You Do to Protect Yourself?
Although many losses from this scam will be eventually returned, it often isn’t worth the hassle and huge amounts of effort you may have to expend. Protect yourself from ever falling victim. If you can, skip the debit cards and use only a credit card instead. If you’re worried about the possibility of accruing debt, treat the credit card like a debit card and only purchase things you can afford and immediately pay the bill after making a purchase. More importantly, be wary of prepaid cards as these do not have the same legal protections as a traditional debit cards. This helpful guide will help you understand the differences in your protections when using credit and debit cards.
Monitoring your accounts carefully will also help you to find and report any discrepancies early.
Learn more about this scam here.