A device called a skimmer is installed in the card slot of the machine. When the card is inserted in the slot, this device captures the card details. A camera installed somewhere above the number pad captures the ATM pin. These details are then used either to clone a card, which is used to withdraw money from ATMs, or the details are used to shop online.
Investors need to be watchful to avoid falling prey to such frauds. "Does the card reader seem to protrude, does it seem loose or wobbly? Does the ATM pad seem different from the usual? If you observe any of these things, it is possible that the ATM machine has been tampered with. Avoid using such machines," says Radha Rama Dorai, managing director-ATM & Allied Services, FIS, a provider of banking and payments technology. If the card reader is wobbly or protruding outward, tug it outward to see if there is an attachment that has been installed. Sometimes, a thin film is placed on the keypad to capture keystrokes. If you notice any such film, again avoid using that machine.
Dorai says that when feeding the pin into the ATM keypad, you should cover the keypad with your free hand so that no camera is able to record the pin. ATM machines located adjacent to a branch usually have a guard. It is safer to use such machines. Also, stick to machines at heavily frequented locations rather than those in standalone locations.
Another precaution that all bank customers should exercise is to enrol for their bank's SMS service so that they can receive real-time alerts in case of a fraudulent withdrawal from their account. Some banks have introduced a feature of ‘locking’ the card or setting limits on how much can be spent using the card. Make use of these services.
Despite all these precautions, if your card does get compromised, call the bank and get your card blocked. This will prevent further withdrawals. Early notification will also help you get compensated if it is established that the breach did not occur due to your fault. The next step is to file a first information report (FIR) at a nearby police station.