ATM frauds on the rise: How can users make a difference?

ATM frauds
ATM frauds on the rise: How can users make a difference?

ATM Frauds in relation to digital payments, debit, and credit cards are rising at an exponential rate. Statistics represent that the financial year 2020 recorded over 50,000 digital banking and payment card fraud cases. Moreover, reports suggest that the value of such fraudulent transactions was around Rs.228 crore.

Since payment card and ATM fraud cases are on the rise, it is becoming imperative for individuals to become aware of such techniques in detail. Additionally, they need to take necessary preventive measures and minimize related risks successfully.

Moreover, individuals can opt for card protection plans that provide financial coverage against misplacement of their payment cards or unauthorized transactions.

Types of ATM frauds in India

ATM frauds
ATM frauds on the rise: How can users make a difference?

Here are the different types of ATM frauds that are now common in India:

  • ATM skimming (cloning)

This process involves using ATM card skimmer, which is attached to the card reader slot of the machine. It retains all the data from the magnetic strip when an individual swipes a credit or debit card. This practice is also commonly referred to as ATM cloning.

Precautionary measure: Pay close attention to the machine to spot anything suspicious. If it seems like the machine has been tampered with, for instance, if the card reading slot appears to be damaged, refrain from using it. Besides taking precautions, one can also take supplementary measures, such as availing Wallet Care insurance policy provided by Bajaj Finserv under Pocket Insurance & Subscriptions.

This policy provides coverage of up to Rs.2 lakh against debit and credit card frauds. Furthermore, besides providing complimentary fraud protection, it comes with a 24/7 card blocking facility. Therefore, in case of an ATM fraud, individuals can place a single phone call and block all their payment cards.

  • Shoulder surfing

Besides ATM card cloning, shoulder surfing is another commonly used tactic to retrieve payment card details. Ensure that the bystander inside is not standing too close to you or is looking at your payment card details.

Precautionary measure: Be wary of suspicious individuals trying to take a look at the screen and refuse help from strangers at the ATM. Also, make a habit of shielding the keypad when entering the PIN.

Nevertheless, individuals can get compensation against such financial losses by opting for a comprehensive fraudulent charges cover. Besides providing compensation against any ATM fraud in India, such an insurance policy extends financial coverage in case of misplacement of payment cards.

  • Keypad jamming

This process involves jamming two buttons’ Enter’ and ‘Cancel’ on the ATM keypad. Therefore, when users insert their credit or debit card and try to enter their ATM PIN, they cannot press the ‘Enter’ or ‘Cancel’ button.

Shortly after, they leave the ATM booth assuming the transaction has been timed out or cancelled; the scammer enters the booth and removes the jammer to withdraw the cash.

Preventive measure: To prevent this type of ATM fraud, individuals must leave the ATM booth only after the home screen reappears. 

  • Dummy cash dispensing tray

This fraud is carried out by placing a dummy cash dispensing tray on the machine’s actual tray. Hence, when an individual withdraws cash, it is collected in the dummy tray without the victim’s knowledge. Once the individual leaves assuming that cash was not dispensed, the scammers enter the booth and collect the amount. 

Preventive measure: Call the customer helpline number and get the payment card blocked at the earliest. Also, make sure that SMS banking services are activated to track unauthorised transactions better at all times. 

Individuals can financially secure themselves against such losses by availing the ATM safeguard insurance policy. Besides offering extensive coverage of up to Rs.50,000, it provides complimentary compensation for ATM assault and robbery.

Preventive measures against any type of ATM fraud are undoubtedly helpful. Nevertheless, scammers are also becoming smarter and coming up with new ways to dupe unsuspecting individuals. Hence opting for a card protection insurance policy is an ideal option.


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