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Tens of thousands of dollars have been stolen in a brazen attack by ATM fraudsters in two of the country's busiest shopping districts.
The scammers fixed skimming devices to National Bank money machines in Auckland's Queen St, Vulcan Lane and Parnell last month. The criminals are believed to
be linked to another skimming attack in Hamilton around the same time.
All three machines are on busy streets and have anti-skimming jitter devices, which literally shake the card, supposedly making it harder for them to be read.
The skimming attack comes as banks admit gangs of foreigners are increasingly targeting ATMs in New Zealand.
The skimmers use a device fitted to an ATM which copies the magnetic strip of a credit or eftpos card as it is fed into the machine. The crooks then use either a hidden camera or "shoulder surf" the victims to obtain PIN numbers.
More than 800 customers used the Auckland ATMs during the narrow timeframe, but the National Bank has refused to reveal how much was taken other than to say the amount was "significant".
As in most skimming cases, the fraud was not detected for weeks until a bank customer was alerted to a suspicious transaction.
As yet, no ATMs of other major banks have been hit by the skimmers, although a small number of BNZ and Westpac customers used the targeted machines.
National Bank refused to reveal details of the police investigation, or if fraud detectives were following any strong leads, but CCTV cameras are located above the Vulcan Lane and Queen St machines.
National Bank spokeswoman Virginia Stracey-Clitherow said all affected customers were alerted and replacement cards issued. Although widespread in Europe, skimming is rare in New Zealand, but she admitted the skimming gangs were "coming to New Zealand now".
The latest attack in Auckland comes shortly after the successful police prosecution of two illegal immigrants, Jan Marius Scutariu, 31, and Andrei Iustin Raileanu.
The Romanian pair stole nearly $35,000 with cloned credit cards after gluing a skimming device to a Westpac ATM in Hamilton - fitted with a "jitter" mechanism to supposedly prevent skimming.
But the "green sleeve" and "jitter" technology, introduced after a Russian couple stole $100,000 from Bank of New Zealand customers in 2006, have failed to stop the most recent scams.
Any losses incurred by banks from skimming are claimed from insurance companies - costs which are ultimately passed on to customers in higher banking fees.
As money machine skimming is rare in New Zealand, police and banking experts say banks make an "economic decision" to use cheaper security measures.
David Tripe, the banking studies director at Massey University, said banks made an "economic decision" to compensate ripped-off customers, rather than upgrade security. "If losses are relatively low, the bank makes an economic decision. At what stage do you need to take further stringent security measures?" asked Tripe.
"At this stage, I would see it as a problem for the banks, rather than for the public."
Maarten Kleintjes, the national police e-crime manager, said ATM skimming was "a cat and mouse game between crooks and banks" as each tried to outwit the other.
"We're quite lucky that we're so far away, no one bothers to come here. Overseas organised crime groups specialise in skimming, but to come all the way to New Zealand would be quite an involved business."
The five main trading banks refused to reveal the true total of ATM fraud in New Zealand, citing security measures.
But statistics released last month show more than $48 million was stolen from Australian ATMs in the year to June.
"Unfortunately, we are now starting to see a long anticipated migration of counterfeit and skimming fraud to Australia from offshore," said Chris Hamilton, chief executive of the Australian Payments Clearance Association.
Because skimming attacks were rare in New Zealand so far, Kleintjes agreed it was cheaper for banks to reimburse ripped-off customers.
"At the moment it's an accounting problem for banks.
"If skimming did happen more often, then surely the banks would go around and change all the ATMs."
All the major trading banks told the Herald on Sunday that security measures were constantly being reviewed and were confident the anti-fraud technology was appropriate.
Westpac, ANZ, National Bank, BNZ and ASB denied that banks purposefully reimbursed customers, rather than use the most expensive technology.
Yet, all agreed that the cost of ATM based-fraud was low, with "only a fraction of the investment required to replace a single ATM", according to Westpac.
The magnetic strip technology used by credit cards was the main problem. Most New Zealand banks were working towards a chip card.
"However, this will take considerable time to implement as both the cards, and card-reading devices like ATMs and eftpos machines all need to be upgraded to read chips instead of the older magnetic stripe technology," said Westpac spokeswoman Liz McIntyre.
* Advice for ATM users
Use secure ATM machines, under video surveillance or inside a bank foyer/branch.
Cover the keypad with your hand when entering your pin.
Do not use an ATM with additional signage attached, eg: swipe here first or use this machine only".
If card is "swallowed" call your bank and report it immediately.
Do not accept help from passers by.
Immediately report any suspicious transactions on your account.
