Banks issue ATM fraud warning

BY PIERS FULLER AND NZPA
In the wake of a sophisticated "skimming" scam from an Auckland ATM that saw 30 customers' bank accounts raided of $40,000, banks are urging cardholders to take extra precaution when using the machines.
Manager of the Bank of New Zealand's Masterton branch, Lisa Hoswell, said that she was not aware of any elaborate ATM scams ever being perpetrated in Wairarapa.
The use of a card reader at the New Lynn branch of BNZ in Auckland is believed to be the first known incident of fraud involving skimming devices to hit New Zealand's 2300 ATMs.
Skimming devices are used to obtain PIN numbers and access details contained on magnetic strips on the back of individual ATM and credit cards. This information is used to produce a fake card, providing access to customer accounts.
The BNZ marketing and business development manager, Shona Bishop, said banks in Australia, the United States and Britain had battled the problem but till this week the crime had been unknown in New Zealand.
"The bank is very concerned about this incident and is working actively with police investigating the matter," she said.
With 210 million ATM transactions annually, the banking industry is treating ATM fraud "extremely seriously" and suspects organised crime is behind the scam ? especially after a second ATM, on the North Shore, was found yesterday to have been tampered with.
"This is scary. It's definitely organised crime because this is not entry-level criminal activity," Ms Bishop said. "It's a level of fraud in New Zealand not seen before.
"These are very sophisticated criminals with sophisticated technology and a very organised infrastructure. They work their way through the country, through every bank and every ATM machine.
"What's happened overseas would support that theory, but we don't have any evidence to support that at the moment."
Detective Senior Sergeant Mark Benefield, head of the Auckland police fraud squad, said the scams were often the work of organised groups who sent out a number of "mules" to withdraw money.
"Clearly there is some organisation with this [New Lynn] one because someone has had to get the data to go out and go to the various money machines and everything to access these people's accounts.
"What is concerning will be the fact that someone is now starting to target in this country and then you'll get the dishonest people in restaurants who will start swiping cards for syndicates, if it goes that way."
Organised groups have been caught skimming at ATMs in Australia recently. Mr Benefield said previous cases of skimming credit cards in this country usually involved looking over someone's shoulder surfing to gain card details.