ATM fraud forces banks to issue fresh cards to 1,100 customers

31 May 2006

Dubai: Two banks were forced to replace ATM cards of more than 1,100 of their customers after they used an Emirates Bank cash machine at Umm Suqeim, that had been hacked into by fraudsters.

But none of the about 1,000 Emirates Bank customers and 154 Standard Chartered card holders who used the ATM machine during the 10-day period till May 24, when the fraud was discovered, have reported any losses, bank officials said.

Abdullah Qassem, Emirates Bank's general manager for operations, told Gulf News that bank employees discovered a pin hole camera and a skimmer on the cash machine when they went to service it on May 24.

The skimmer reads data on the ATM card when it is inserted, while the pin-hole camera transmits images of users punching their personal identification numbers to a computer nearby.

Qassem said the bank immediately blocked the cards of all its customers who had used the machine between May 16 and 24 and then issued new cards to them.

"We discovered this at an early stage. We have informed the police and the Central Bank. This has just affected about 0.1 per cent of our card users," he said.

A spokesman for Standard Chartered bank said the bank immediately blocked 154 cards used by its customers at the ATM and has issued fresh ones.

A few years ago, a Malaysian gang hacked into ATM machines of several banks, siphoning off millions in a matter of days.

The method: How does a skimmer work?
A skimmer is a fairly simple and transparent card-like device that is inserted into the card slot of an ATM machine.

The skimmer reads data on the magnetic strip at the back of an ATM card, which is then downloaded on to a computer. A pin-hole camera that looks like a pin used on bulletin boards is mounted on the ATM, usually over the ATM's key pad.

The camera transmits images of users punching in their PIN numbers into the ATM machine to a computer nearby.

Fraudsters then use this data to print new cards and then hack into accounts of bank customers.

Bankers say customers should immediately report the presence of any suspicious objects on cash-vending machines.