The next time you go to use your debit card you might want to think twice. Regulators are currently worrying over the new wave of cybercriminals. In an article by E. Scott Reckard in the Los Angeles Times, Reckard writes that “regulators are warning bankers that hackers have succeeded in changing the controls on automated teller machines to enable thieves to make nearly unlimited withdrawals using fraudulent debit, prepaid and ATM cards.”
The scheme for the hackers has so far been to schedule these withdrawals around the holidays and weekends. During these times, ATMs are loaded with extra cash in order to handle the expected additional withdrawals. In addition, hackers are aware that monitoring of the banks lessens at these points allowing more time for them to carry out their schemes.
According to the article “ATM hackers stole $45M in ‘21st century bank heist,’ fed say” by Fox News, “The first federal study of ATM fraud was 30 years ago, when the use of computers in the financial community was growing rapidly. At the time, the Bureau of Justice Statistics found nationwide ATM bank loss from fraud ranged from $70 and $100 million a year.”
In the recent ATM hacking of $45 million, a worldwide gang hacked their way into a database of prepaid debit cards. The issue with prepaid cards is that not all of them come with deposit insurance. It would seem that the hackers, upon breaching bank databases, eliminated withdrawal limits on pre-aid debit cards while also creating access codes for them. According to Fox News, “There were two separate attacks, one in December that reaped $5 million worldwide and one in February that snared about $40 million in 10 hours with about 36,000 transactions.” The plundered ATMs are located over a vast number of countries: Romania, Egypt, Britain, Japan, Russia, Sri Lanka, Canada, etc.
In another recent hacking, Target and its customers were subject to major losses – 110 million customers to be exact. According to Target, the customers affected by this were past as well as current customers. As already stated, hackers often choose holidays and weekends to schedule their schemes; the unfortunate Target incident happened in the weeks following Thanksgiving 2013. In the article “Target: Hacking hit up to 110 million customers” by CNN Money, it was reported that “Experts suggest that customers who used debit or credit cards at Target between Nov. 27 and Dec. 15 should contact their card issuer and get a new card with a new account number.”
According to experts, it is the small and medium-size banks that are the most vulnerable. It is wise to reconsider using your debit or ATM cards; it might be better to use a credit card since they are better-protected. Even though bank customers are protected by federal deposit insurance, it can still be a major inconvenience if your data is stolen and your accounts drained.