Major banks, such as HDFC Bank Ltd, Kotak Mahindra Bank Ltd and Federal Bank Ltd, recently sent out SMSs asking some customers to change the personal identification number (PIN) of their debit cards immediately. An SMS from a private bank to one such customer read, “With the spike in fraudulent transactions at ATMs in banks, your debit card ending XXXX could have been compromised. To protect your account, we advise you to change your PIN immediately. You can change your PIN via Net Banking, Mobile Banking or at an ATM."

Banks we spoke to said that this was a precautionary measure and no breach was reported on their part. Puneet Kapoor, senior executive vice-president, Kotak Mahindra Bank, said, “The National Payments Corporation of India (NPCI) had alerted that a particular network may have been compromised. In this suspected duration, customers whose cards were used through this particular channel, were alerted through a direct communication." Here’s a look at different kinds of ATM frauds out there.

Instances like these put the focus back on security of ATM cards and their usage. Types of frauds include skimming, cloning and data theft.

Skimming and cloning: Bankers and security experts state that this is the most widely known form of fraud at ATMs. A card reader, which can extract all the information from the magnetic strip present on cards, is installed in the slot where you dip your card. A hacker will then transfer this information on to a duplicate card. In some cases, you will also find a fake keypad placed above the actual keypad. Once you enter the PIN, the machine will not show any response, making a user think that the system is malfunctioning. However, the fake keypad would have copied the PIN you had entered.

Data theft: Data theft is a common way to con, especially at open ATM installation areas such as malls and shopping complexes where a person standing behind could try to distract you after you enter the PIN. Frauds also take place at point of sale (PoS) terminals, where payments are made to make a purchase. Experts say that such frauds can take place at restaurants, shops and other merchant outlets.

The first step to protect yourself from any frauds is precautions. Opt to upgrade your card to a chip-based one, as it has added layers of safety. “Information in chip-based cards is encrypted. With a chip and PIN, card information is not validated by bank servers unless a correct PIN is used, whereas information on a magnetic strip is easily accessible," said Amit Jaju, executive director—fraud investigation and dispute services, EY.

Experts also recommend changing your PIN every 6 months. While using your card at ATMs or PoS terminals, enter your PIN carefully.

You can also limit the daily withdrawal amount on the debit card by informing your bank. If you feel that you may be a victim of such frauds, contact your bank immediately.

Banks accept liability for some frauds, not all. For instance, the bank will be liable if there was a failure of its systems and infrastructure, resulting in the fraud. But, a customer may have to share liability if there was negligence on her part.

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