Automated Teller Machines have been in use for about 20 years, offering bank customers convenient access to their money and account information at any hour of the day or night. Public ATMs number in the millions and are easy to find, easy to use, and--usually--secure. However, there are some aspects of ATM design and use that should inspire caution on the part of customers.
Each ATM has a master password that can be used for the purpose of accessing the machine’s basic functions in case of a mechanical breakdown or communications failure. These master passwords can be used to reprogram the machines to dispense more money than they are asked for – using a prepaid card with no personal information attached. In addition, theoretically, an ATM hacker with access to that password could download transaction history, including the card numbers and personal identification numbers (PINs) of people who have recently used the machines.
ATM transactions can be manipulated by banks seeking to charge customers fees. When the ATM posts a debit item to the customer’s bank account, the withdrawal request may be honored even if the funds in the account are inadequate to cover the withdrawal. This can result in an overdraft charge assessed by the bank when the account is reconciled at the end of the business day.
ATMs can be extremely expensive to use. Those not owned and operated by the customer’s bank will charge a fee for each transaction--even if the customer only wants a quick balance statement. In addition, banks may charge an out-of-network fee as well, resulting in a double charge to the customer account. ATMs used in foreign countries result in stiff fees as well, up to $10 for each transaction.
Thieves can set traps inside the ATM card slot that can prevent the next card from being returned by the machine. If a naïve or trusting customer believes his card has been confiscated by an ATM, he may cooperate with a stranger claiming to assist him. The thief tells the victim to enter his PIN number while the thief presses some combination of buttons on the ATM. When the card is not returned, the victim leaves the scene, and the thief retrieves the card using a small, invisible piece of tape adhering to the card. Using the PIN, he or she then withdraws money from the victim’s account.
Thieves can also install devices inside card slots that skim, or steal, information directly from the card's magnetic stripe, which carries account and PIN information programmed into the card by the bank. Using this information, thieves can duplicate the card, program their own magnetic stripe, and use it to withdraw money.
Criminals have also been known to purchase their own ATM machines and set them up in public places. ATMs are computers that record every transaction, including account numbers, balances and PINs. Cards previously used in the machines can be easily duplicated and used at the criminal's leisure to withdraw money from a legitimate account. Although ATM manufacturers are supposed to do a background financial and criminal check on buyers, the safeguards can be overcome.