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08-03-2003 04:36 AM |
Are you safe at the ATM (cash machine)
Criminals Focus on Weak Link in Banking: A.T.M. Network
By WALT BOGDANICH
August 3, 2003
The New York Times
Entire article found here.
Quote:
He fenced stolen jewels, committed bank and credit-card fraud and had been accused of having links to an Albanian-Yugoslavian criminal gang. Cloaking himself in nine aliases and Armani jackets, he was a smooth, multilingual master of the con, investigators and people who knew him say.
His name is Iljmija Frljuckic, and by all accounts, he had no business being around anybody else's money.
Yet after being deported in the late 1990's, he slipped back into the United States and set up shop as a banker, not in a marble lobby under the watchful eyes of auditors and regulators, but in the virtually unregulated world of privately owned automated teller machines.
To tap into this electronic network, Mr. Frljuckic (pronounced Furl-YOU-kich) did not have to produce so much as a valid driver's license. After buying these machines — the kind commonly found in convenience stores, delicatessens and other retail outlets — he and his associates installed devices that captured, or "skimmed," personal bank account information from at least 21,000 people, prosecutors say. They used that information in 2001 and early 2002 to make fake A.T.M. cards, then stole at least $3.5 million, mostly from A.T.M.'s in New York City, according to the latest federal charges filed about two months ago in Manhattan.
Before Mr. Frljuckic came along, small-time crooks had made crude forays into A.T.M. fraud. But in its size and technical sophistication, investigators say, the Frljuckic case is a con of an entirely different order — a new turn on identity theft, a jolting warning of the vulnerability of an A.T.M. system that has exploded in size in the last few years.
No one can say precisely how much is lost through A.T.M.-related crimes. In fact, no government agency knows how many cash machines are operating, where they all are or who owns them. Though banks are reluctant to discuss their losses, they say there is no cause for alarm. But from Canada to Malaysia to the United Arab Emirates, investigators report new assaults on A.T.M.'s.
The criminals, both foreign and homegrown, include gangs, embezzlers and, on occasion, money launderers, according to investigators and public records. And while A.T.M. industry officials say the Frljuckic case shocked them into tougher self-policing of privately owned machines, they also confess that the thieves are remarkably resourceful, shifting their attention now to bank-owned machines. In recent months, skimming devices have been attached to bank machines around Boston and Chicago.
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A.T.M.'s have been around for decades, but became ubiquitous on the American landscape in 1996, when new surcharges on withdrawals made it possible for private entrepreneurs to profit by owning machines. Since then, the number of machines, which cost as little as $3,000, has tripled, to an estimated 370,000, fueling the growth of companies that sell and service them.
This growth, in turn, has spawned criminal activity that goes beyond just the skimming of bank account numbers. Embezzlements in recent years have involved companies that supply cash to the expanded A.T.M. market, including a New Jersey company, Tri-State Armored Services, where $50 million turned up missing. By contrast, the biggest bank robbery in the last 25 years, according to federal statistics, involved $11 million.
Banks call credit-card and check fraud a much bigger problem. Besides, they say, rare cases of A.T.M. fraud are a small price to pay for convenient cash. But banks are not eager to publicize breaches of A.T.M. security.
"They don't want to give people ideas," said Nessa Feddis, a lawyer with the American Bankers Association.
<center>http://graphics7.nytimes.com/images/.../03atm.184.jpg
Some con men are using privately
owned automated teller machines
to capture personal bank account
information and make fake A.T.M.
cards. Picture by Fred R. Conrad/NY Times</center>
The nation's biggest A.T.M. fraud began in late 2000 with trial runs in California, Florida and New York. At 13 sites, thieves started installing machines rigged internally to capture bank data and personal identification numbers.
They were in no hurry; the longer they waited, the more account numbers they could steal. In four months, with just the dozen or so machines, they had the electronic keys to 4,000 accounts, fraud investigators say.
Only when the gang began siphoning money did banks and customers realize they had been scammed. By the time the rigged machines had been identified, they had vanished, along with their owners and tens of thousands of dollars.
By the end of June 2001, banks had identified the compromised cards and electronically blocked them.
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There is much more to this article found at the link above.
Do you use a cash machine outside the bank? Do you fear this kind of fraud? Has this fraud ever happened to you?
Tell us your stories.
I use MAC/ATM/cash machines, but I would never use one that wasn't attached to a bank unless it was an extreme emergency. And then I have credit cards and checks. After reading this entire article, I may never use one of those free standing machines even in an emergency.
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