ATM Industry Association reaffirms strength of ATM security

July 18, 2008 - The ATM Industry Association reaffirmed the industry's faith in ATM security, despite recent cases of PIN fraud and ATM attacks.

"The ATM, in general, and the personal identification number in particular, are extremely secure and safe for consumer use," said Lana Harmelink, international director of ATMIA. "There are over 1.6 million ATMs in the world performing millions of transactions every day, and the scale of ATM crime is truly minute compared to these volumes."

As criminals trying to exploit ATMs modified their methods over time, ATM industry has developed new technologies and safeguards to prevent fraud. An example of this kind of proactive ATM security is the implementation of encrypting PIN pads and Triple-DES encryption. Those security enhancements, which instantaneously encrypt PINs within the PIN pad using strong encryption standards, are now mandatory on all ATMs operating in the United States. The standards, Harmelink says, have effectively eliminated the electronic theft of PINs from the ATM.

"Most of what is commonly reported by the press as 'ATM fraud' is actually PIN fraud (or debit-card fraud)," Harmelink said. "This fraud occurs when criminals obtain counterfeit cards and PINs from skimming of either POS terminals or databases operated in the retail environment. In these cases, the ATM is simply used as a means to retrieve cash it is not the point where the cardholder's card number and PIN were stolen or copied, and in no way represents a threat to consumers."

ATMIA says a combination of banking laws and network rules ensure that consumers in many countries, including the United States, are protected from monetary losses from fraudulent use of ATM cards, PINs and personal financial information. In the United States, Federal Reserve Regulation E ensures that consumers are covered and do not bear the financial burden of fraud.

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