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Why EMV Cards Don’t Protect You at ATMs and Gas Pumps

Credit Card Basics, Credit Cards
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Why EMV Cards Don't Protect You at ATMs and Gas Pumps

As retailers push to update their credit card readers and systems to be compatible with EMV chip technology, crooks have turned their attention to gas pumps and ATMs to steal card information.

Law enforcement officials are reporting a spike in the use of credit card skimmers at ATMs and fuel pumps, according to NBC News. Skimmers are devices — often nearly undetectable — that fit over a card reader and copy credit or debit card information from the magnetic strip when you swipe. Identity thieves can then use the data to run up fraudulent charges.

ATMs and fuel pumps are more vulnerable

Credit and debit card payment networks — such as Visa, MasterCard, Discover and American Express — have pushed to increase card security with EMV chip technology. And October 2015 saw a shift in liability concerning who pays for fraud when it happens. Under the new terms with card issuers and retailers, whichever party doesn’t support the more secure technology is responsible for covering the cost of fraud. Merchants that once had no liability for card fraud will now be held responsible if they haven’t upgraded to EMV-compatible technology.

But that liability shift wasn’t universal. Payment networks aren’t requiring banks and gas stations to update card readers on ATMs and fuel pumps until October 2017. The one exception: MasterCard included ATMs in its October 2015 liability shift.

“Self-service gas pumps — formally known as ‘automated fuel dispensers’ — were given this extension because upgrading gas pumps is far more expensive than upgrading normal in-store payment terminals,” says Sean McQuay, NerdWallet’s resident credit card expert and a former strategist at Visa. “This represents a huge gap in safety for any consumer that buys gas at self-serve pumps — or, in other words, nearly nine out of 10 Americans.” The same applies to ATMs.

This means that even though you might be carrying new cards with EMV chips, they’re just as susceptible to fraud at the pump or an ATM as they were before. In fact, they may be more vulnerable now that identity thieves are targeting those terminals more.

“Fraudsters want to ‘get while the gettin’s good’ by stealing as much money from the credit card system as they can before higher EMV adoption rates block them out entirely,” McQuay says.

How to protect yourself from skimming

Credit or debit card fraud is rarely the first thing on your mind when withdrawing cash or filling up. There are, however, a few things you can do to give yourself a little more protection:

Give the card reader a good look. Credit card skimmers aren’t easy to spot. In most cases, they don’t look different from the card reader itself. Even so, keep an eye out for signs of tampering. Most ATM and fuel-pump card readers have a tamper-proof seal that, when broken, tells you something is amiss. Other potential tipoffs include mismatching materials, a crooked or misaligned reader, or different color schemes.

If something looks suspicious, ask someone from the bank or gas station to inspect the reader — or simply use another one.

Use pumps or ATMs only with high visibility. Thieves are less likely to install a skimming device in the open. This means you’re less likely to come across one at the fuel pump closest to the front window of the gas station or the ATM right outside the bank branch.

Use credit instead of debit. Credit cards typically offer better fraud protection than debit cards. Credit card fraud also doesn’t pull money out of your checking account the way debit card fraud does.

Don’t use your card at all. If you have the time, skip the ATM and make your withdrawal at your bank’s local branch. Also, consider using cash to pay for fuel. It might be less convenient, but it can keep you from having to deal with potential fraud.

Review your statements carefully. This won’t prevent skimming, but it can keep things from getting worse if you do fall victim to identity theft. Check your online accounts regularly or sign up for transaction alerts. Notify the card issuer immediately if something doesn’t look right.

The bottom line

Despite improvements in card security, the system still has weak points. No one is more interested in protecting your personal information than you, so it’s important to take precautions to stay ahead of fraudsters. Although the likelihood of having your card skimmed remains low, increased caution can decrease your chances even more.

Ben Luthi is a staff writer at NerdWallet, a personal finance website. Email: bluthi@nerdwallet.com. Twitter: @benluthi.


Image via iStock.