Banks begin blocking skimmed cards

Wednesday January 27, 2010

Westpac Banks have blocked over 10,000 cards over the last seven days since the release of the stunning police report on card skimming concluded that $50 million has been stolen to date from NSW bank accounts through skim techniques.

The statement released by the NSW police detailed of international criminal gangs that are now attacking EFTPOS machines in an unprecedented number located in retailers, convenience stores, fast food outlets and smaller EFTPOS locations. In these locations, authentic EFTPOS PIN pads have been stolen from retailers and replaced with 'fake' machines.

This is the first time that EFTPOS machines have been used to skim credit cards and debit cards, with ATMs the usual targets of these kinds of large gang-style scams.
In defense against these scams, The Daily Telegraph reported that Westpac/St George Banks have now blocked both debit and credit cards over the last 10 days, with the number of cards blocked being between 10,000 and 11,000. The action has been spouted as preventative with the number of actual customers affected being estimated closer to several hundreds.

Banks have reportedly been scanning bank statements for suspicious transactions or transactions at locations deemed "at-risk".

Many customers have been targeted through compromised McDonalds EFTPOS machines located across Sydney which is reminiscent of one McDonald's store in Perth which fell victim to this practice when they had their legitimate EFTPOS devices swapped with compromised card-skimming versions. This one particular incident resulted in 3500 customers losing $4.5 million.

This particular incident resulted in a security upgrade of McDonald's EFTPOS terminals nationwide in December. To date it is unclear which stores of how many have been affected by the skim scam with a McDonald's spokeswoman only stating that the details cannot be discussed. However, it is understood that the banks, police and retail outlets are working in conjunction.

"We're working closely with fast-food outlets and NSW Police to minimise any impact on customers," a Westpac spokesman said.

NSW Police state that all Australian capital cities and larger regional areas have been targeted in some level with known criminal activity still "ongoing" and based in suburban Sydney and NSW coastal cities, according to a statement from NSW fraud squad head Detective Superintendent Colin Dyson last week.

To date, six people have been arrested in NSW in relation to the scam but police say that it is a very large, international group involved.

NSW Police have now issued a list of recommended behaviours for both consumers and merchants to follow in order to better protect themselves with Supt Dyson stating that consumers need to monitor their PINs closely and change them frequently to minimize the chance of losing all funds on any accounts.

"There is sometimes a lag between PINs being compromised and used," he said.

"If someone whose details are skimmed changes their PIN quickly, the data can be useless to the criminal."

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