Theft device targeted BNZ ATMs

The device used to steal more than $100,000 from New Zealand bank accounts was likely to have been made to fit a certain model of money machine - which turned out to be those operated by the Bank of New Zealand.

The bank was first alerted to a possible skimming fraud in early March by a customer who noticed something suspicious attached to a BNZ machine in New Lynn.

"There are multiple types of skimming devices but you would always normally see them, however some customers would not notice them," the BNZ's Shona Bishop said at the time.

No device was found in New Lynn and the bank did not move to block cards and alert customers for two weeks, when customers started calling about unusual transactions.

BNZ started to physically monitor the New Lynn machine but the fraudsters had two other ATMs in their sights - a standalone machine in Silverdale and one in the Pakuranga Plaza.

All three machines were the Diebold model 1072 - one of a number of ATMs manufactured by the American company - and 21 of them are used by BNZ throughout the country.

The machines are being replaced or removed.

Other major banks spoken to by the Weekend Herald believed the skimming device was designed to fit the make of ATM operated by BNZ, which is why their machines were not caught up in the scam.

A BNZ spokeswoman said the bank had not established what sort of skimming device had been used but "we believe that specific skimming devices are designed to work on specific machines".

BNZ referred questions about the skimming device to police carrying out the investigation, although no device was found on any machine and police are saying little about the case.

"It's not helpful to speculate as to the exact nature of the device as there is a range of skimming devices used internationally," the bank spokeswoman said.

It is known, however, that the device contained a scanner to copy confidential account details stored on bank cards. Cards were put into money machines, the transaction made and the card returned as if nothing had happened.

Other types of skimming can involve sleeves or traps - sometimes known as a "Lebanese Loop" - placed over the card slot.

The device traps the cards in the machine and the customer thinks they have been "eaten" by the ATM.

The fraudsters rush to help the stricken customer and suggest trying the PIN again, as they watch. When the owner leaves the card is retrieved and money stolen.

The account information skimmed from New Zealand bank cards was transferred from the scanner on to phonecards, which operate in a similar way to money cards by holding information on a magnetic strip.

Some of those phonecards were recovered from central Auckland ATMs after being retained because the bank account had been blocked.

At some stage, probably early in the fraud, information skimmed from cards used at a BNZ machine in the Pakuranga Plaza was passed to Canada. It was copied on to dummy cards and used at ATMs in Toronto to withdraw $49,000.

The transactions were traced back to the Pakuranga machine.

Meanwhile, the phonecards holding information skimmed in New Lynn were traced by identification numbers back to a souvenir shop in downtown Auckland.

Police were then able to put a face to the fraud inquiry - releasing a security photo of a man buying the phonecards on March 26. He purchased more cards on three occasions at a nearby liquor store.

The man speaks with a heavy accent and has poor English, police said. He is European with an olive complexion.

The Auckland fraud began around the time Australian police arrested four men on the Gold Coast for the same crime. Acting Inspector Graham Clark of the Brisbane police fraud and corporate crime group told the Weekend Herald he did not believe there was any link between the skimming frauds.

"It's one of those things that you could probably assume there may be a connection because of the possible similarities between the offences [but] there is no way of knowing if they are linked or not."

Mr Clark said the four men in custody were working alone in Queensland. "We tracked these people coming into the country ... so there was only the four of them working here and we got all four."

The men, Canadian residents of eastern European decent, were caught before any money was stolen from bank accounts.

Police started investigating the scam after a bank customer spotted a suspicious device on a central Brisbane ATM and pulled it off the machine.

Three men approached him and grabbed the device.

Police allege the gang fitted a card skimmer to an ATM to copy card details but were caught at the beginning of their run.

A police raid on a Gold Coast address recovered computer equipment and software used to download the skimmed details, and keypad overlays allowing them to retrieve the personal identification numbers.

The keypad plates contained a microchip to record PINs.

Mr Clark said police had traced the skimming device to Southeast Asia and allege the gang had been operating in Malaysia before heading to Queensland.

Like New Zealand, the alleged fraud was Brisbane's first case of ATM skimming and Mr Clark warned the crime would become more prevalent in Australia and New Zealand.

Criminals faced with smarter technology in other parts of the world would travel here to carry out their scams, he said.

"Virtually everywhere else in the world is switching to smart card technology where they have the chip on the cards rather than the magnetic strip, and that is a lot harder to fraudulently reproduce.

"But because everywhere else in the world is assuming that technology and we are not at the moment, it's making us a soft target."