Florida Banking May 2024

BANCSERV ENDORSED PARTNER: STS GROUP

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DEFENDING AGAINST ATM SKIMMING ATTACKS: F

STRATEGIES FOR FLORIDA BANKS

BY ADAM STEPHENS, CHIEF DEVELOPMENT OFFICER OF STS GROUP

I n the digital age, the convenience of ATMs and ITMs has become an integral part of modern banking. However, with this convenience comes a growing threat: ATM skimming attacks. These attacks have been on the rise in recent years, posing significant risks to both financial institutions and their customers across Florida. In this article, we will explore the rise of ATM skimming attacks and offer strategies that Florida banks can implement to prevent them, drawing on credible sources and industry best practices. The Rise of ATM Skimming Attacks It is estimated that skimming costs financial institutions and consumers more than $1 billion each year. Last year in Florida, the number of compromised cards, including all types of cards, was 7,901 — up from 2,873 in 2019. That’s a 175 percent increase.1 The increase in ATM skimming attacks can be attributed to several factors: 1. Technological Advancements: Criminals are using increasingly sophisticated skimming devices, making it harder for customers to detect them. 2. Increased Connectivity: ATMs are more connected than ever, making them vulnerable to remote attacks and data theft. 3. Evolving Fraud Tactics: Criminals continuously adapt their techniques, making it challenging for banks to keep up with the latest threats.

4. High Reward, Low Risk: ATM skimming is an attractive option for criminals because of the potential for high financial gain with relatively low risk compared to other forms of theft. The Impact of Skimming Attacks in Florida Skimming attacks across the state of Florida are happening consistently and more frequently. Here are recent skimming events in Florida that made local news headlines: • Skimming devices were reported in Petaluma and Rohnert Park, according to authorities.2 • Morgan Hill police found six skimmers and a tiny camera at two ATMs owned by Bank of America. Just a few months before, another set of skimmers was found at another location in the same area.3 • The FBI is asking for the public’s help in finding three men wanted in a South Florida ATM skimming scam that swiped information from hundreds of bank customers. Authorities say a group placed the skimmers at 18 bank branches, resulting in the theft of information from at least 407 customers. 4 • Two men are accused of skimming debit card information from ATM locations throughout the Florida Panhandle to steal more than $11,000 from victims. “During that period, it was reported to us that approximately 700 cards were skimmed at various locations,” the sheriff’s office said in a release. 5

1. https://www.cbsnews.com/miami/news/card-skimming-on-the-rise-across-south-florida/ 2. https://www.northbaybusinessjournal.com/article/news/how-to-protect-yourself-from-atm-skimmers-according-to-the-fbi/

3. https://www.nbcbayarea.com/news/local/morgan-hill-card-skimmers-bank-of-america/3160849 4. https://www.nbcmiami.com/news/local/trio-wanted-by-fbi-in-south-florida-atm-scam/2016668/ 5. https://www.fox10tv.com/2023/04/25/700-cards-skimmed-bank-atms-northwest-florida/

18 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING