5 ATM Scams That Can Break the Bank

Over the last several decades, automated teller machines (ATMs) have become commonplace, from bank lobbies to shopping centers to gas stations. As of 2022, there are more than 2.2 million ATMs around the world. As a result of their ubiquity, people casually use these virtual cash dispensers without a second thought. The notion that something could go wrong never crosses their minds.

Unfortunately, things are not always as they seem at the ATM. Most ATM scams involve criminal theft of debit card numbers and personal identification numbers (PINs) from the innocent users of these machines. There are several variations of this confidence scheme, but all involve the unknowing cooperation of the cardholders themselves.

The first step in avoiding these schemes is to become aware of them. Let's explore some common ways people get ripped off at ATMs. 

Key Takeaways

  • ATM scams can involve stealing your debit card number or personal identification number.  
  • Popular scams that thieves use include using a counterfeit device for access to the door to the ATM and using a false façade on the front of the machine. 
  • Some criminals can swipe data from free-standing ATMs using cracking programs. 
  • Other forms of ATM scams include good old-fashioned stealing the entire ATM, or placing a fake deposit receptacle at the ATM, and putting an “out of order” sign on the machine. 
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5 ATM Scams That Can Break The Bank

1. Every Little Thing It Does Is Magic

One common scheme begins when a bank customer swipes their debit card in the device that opens the door to the ATM vestibule typically found in a bank's inner doorway. Because most people are unaware of precisely what this magnetic reader should look like, criminals can place a counterfeit device that reads and copies card numbers on the outside door without being detected by customers.

Once the customer is inside, a hidden surveillance camera records PINs as customers enter them on the ATM keyboard. The result of this information gathering is the illegal creation of a duplicate card that thieves quickly use to withdraw all the funds in the connected bank accounts as quickly as possible.

Detection of this particular fraud is difficult for the average consumer as there are several dozen manufacturers of legitimate swiping devices. Attempting to distinguish a real one from a fake is almost impossible.

2. Don't Stand So Close to Me

Another method of trickery involves the attachment of a false façade over the ATM machine. Though the machine looks normal, in reality, the attachment will "eat" your card and display an error message. Your PIN is usually recorded by a hidden camera, or in some cases, by a "helpful" person standing nearby who suggests that you try to enter your PIN again. Of course, this person is actually a criminal, and moments after you leave, they will retrieve your card from the false front of the ATM and walk away with both your card and the access code.

Other times, an overlay will "skim" the card without destroying it, collecting its information along with the pin code and other data you may enter. For the user, it appears to be a normal transaction, but the thieves now have your card number. In 2021, for instance, the FBI identified an ATM skimming fraud of almost $600,000 throughout the Midwest.

3. Ghosts in the Machines

Freestanding ATMs are also subject to criminal activity. These devices are located in areas as varied as airport terminals and self-service gasoline pumps. In some situations, criminal hackers are able to capture account information by using WiFi scanners and cracking programs to download transaction data when the systems fail to be protected by high-level encryption software. 

The most audacious of ATM scams is the installation of machines whose only purpose is to steal information. This criminal confidence scheme was once a popular activity of organized crime circles. Seemingly normal ATMs would be placed in small shops, bars, and other venues. The machines were never actually loaded with funds, but instead were there solely to entice users to swipe their cards and enter their PINs. After collecting this information, an error message would appear. These seemingly innocent devices provided criminals with a steady flow of stolen banking information. Because of their placement in high-traffic areas, users did not realize that all users were unsuccessful at withdrawing funds.

4. Making the Best of What's Around

An old-fashioned scam that still reaps profits for criminals is the placement of a deposit receptacle in an ATM vestibule with a sign over the automated machine stating it is out of order. Here, the scammer's goal is to capture cash deposits that were intended for the more secure electronic banking machine. While it may seem obvious that depositing money in this unsecured fashion is a bad idea, the comfort, and trust that people have when entering a financial institution often allows them to suspend their suspicions as they believe that there is no safer place than a bank.

5. Demolition Men

Finally, criminals who are too impatient to go through the complex process of stealing bank accounts and personal identification numbers will simply steal an entire ATM. Typically, this crime occurs in the overnight hours inside a business, such as a supermarket. The thieves will break-in, use the store's forklift (which is normally used for the benign purpose of moving cases of beer and soda) to rip the ATM off the floor and load it onto a waiting truck. As a fully loaded ATM can hold tens of thousands of dollars, these have become prime targets.

How Many ATMs Are There in the World?

According to industry estimates, more than 2.2 million ATMs are active globally as of 2021.

Are Bitcoin ATMs Safe?

Bitcoin ATMs are terminals or kiosks where individuals can anonymously buy or sell Bitcoins electronically. Even though they are connected to the internet, experts agree that today's Bitcoin ATMs are safe since they use high-level encryption. Moreover, Bitcoin itself uses a public-private key pair, and nobody can steal or move your bitcoins without your personal private key. The machines are also built with safeguards against physical or hardware malfunction as well as software protections against malware.

Will Entering My PIN # Backwards Alert the Authorities to a Possible Threat?

No. Despite the prevailing urban myth, entering your PIN in reverse (or in any other combination) will not alert the police or the bank. This idea gained popularity in the mid-2000s through the 2010s as viral social media posts suggested this emergency measure. However, it has been confirmed to be false.

The Bottom Line

Don't let a simple transaction like withdrawing money from an ATM be a way for thieves to get the best of you. To avoid scams like these, listen to the cautionary voices in your head and be careful when something seems amiss. Even in what seems like normal circumstances, shield the keyboard with your other hand when entering your PIN—it's no fun to be driven to tears by a crime you could have prevented. And of course, if you spot a scam in action, don't apprehend the criminals yourself—let the police deal with that.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. ATM Marketplace. "ATM Industry Association (ATMIA)."

  2. Arizona State University Center for Problem-Oriented Policing. "Robbery at Automated Teller Machines."

  3. Experian. "How to Protect Yourself Against Card Skimmers at Gas Stations."

  4. FBI. "Romanian Nationals Sentenced To Federal Prison For ATM Skimming."

  5. Claims Journal. "As Criminals Innovate, ATM Thefts Becoming a Growing Source of Insurer Loss."

  6. ATM Marketplace. "ATM Industry Association (ATMIA)."

  7. Hermes Bitcoin. "ARE BITCOIN ATMS SAFE ?"

  8. Snopes. "Will Entering Your PIN in Reverse at an ATM Summon the Police?"

  9. Joseph Steinberg. "How to Protect Yourself From Being Robbed at an ATM."

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