Now offering cryptocurrency, ATMs targeted for crypto fraud
ATMs have been part of banking and financial services for more than half a century. But, until recently, they served primarily as a vehicle for receiving money, depositing checks or checking balances.
However, the addition of cryptocurrency to ATMs in recent years has added a new wrinkle to basic card skimmers and old-fashioned PIN snatching. More and more cybercriminals are considering the reliable and traditional ATM as a focal point for their cryptocurrency scams. Indeed, the ATM Industry Association (ATMIA) announced last month that he was launching a nationwide program to educate “law enforcement and consumers … about cryptocurrency fraud schemes.”
“Although the vast majority [about 99%] cryptocurrency transactions represent legitimate activity, some consumers fall victim to clever scammers,” according to the ATMIA statement. “People who would never hand over a blank check or their credit card to a stranger are tricked into making a cryptocurrency transaction for one. And these are usually the type of romance, investing, and commodity scams that have been around for decades.
In fact, ATMIA created its own “ATM Cryptocurrency Deployers Advocacy Group” in 2021, when executives noted that “membership of crypto ATM deployers has really grown in the last year,” according to David N. Tente, executive director for the United States, Canada and the Americas. for ATMIA.
Cryptocurrency is new to ATMs, but old scams are still safe for fraudsters
While the incidence of cryptocurrency ATM scams has not necessarily increased as much in recent months, “the problem has grown as the number of crypto ATMs and kiosks has increased rapidly over the past two years. “, Tente said.
According to ATMIA, there are over 30,000 ATMs and kiosks around the world that offer cryptocurrency services, mostly in the United States. Although this represents less than 10% of the 500,000 traditional ATMs in operation today, the increased interest and use of cryptocurrency (even in light of the recent crypto-crash) means that many of these Conventional ATMs can be converted to accept cryptocurrency, according to Tente.
As is often the case with financial fraud, many scams perpetrated on crypto ATMs, issuers and users look like the same “scams that have been around for decades,” Tente added. “These programs always have an element of urgency. Payment must be made now.
Tente pointed out that for many cyber thieves, “cryptocurrency is a more attractive form of payment than a wire transfer or postal check”, due to its lack of an audit trail and anonymity. “Criminals simply change the way victims pay, using the same scheme,” Tente said, adding that often fraudsters target elderly, isolated or naive crypto users, believing they are the least likely to push back.
“People should be wary of anyone they don’t know asking for money for any reason,” Tente said. “If any request for money is made to them, [they should] get a second opinion from someone they know and trust.
In its June release, ATMIA described six types of fraud schemes it has seen emerge at ATMs in recent months, as cryptocurrency-enabled ATMs and related scams have increased, as well as recommendations to law enforcement on how to handle these suspicious schemes.
“The coexistence between cash, crypto, digital currencies and ATMs has already been established,” ATMIA CEO Mike Lee said in the June statement. “But as an industry body, it is our responsibility to self-regulate at all times and to do all we can to ensure the security and legitimacy of transactions, working with law enforcement to combat all types of criminal attacks.”
Even without the influx of cryptocurrency, more than a third of the $28 billion credit card fraud losses worldwide in 2020 were lost to ATM acquirers and merchant acquirers [more than $10 billion].
“Acquirers and payment processors have long relied on rules-based technology to prevent merchant fraud,” according to Amyn Dhala, product manager at Brighterion, a Mastercard company that focuses on technology and Security. “The challenge? Old rules-based systems don’t adapt as quickly as criminals.