Is it EVER safe to use a cashpoint?

By LAUREN THOMPSON
Updated: 20:19 EST, 23 November 2010

Thousands of people could be at risk of cash machine fraud because it is now impossible to tell if a machine has been tampered with, experts warn.

Around £36 million was withdrawn fraudulently from cash machines last year and 259 machines were tampered with by criminals, according to machine network Link.

Steven Murdoch, a fraud expert at the University of Cambridge, says: 'It is quite easy to capture someone's card and Pin number from a cash machine. Fraudsters now hide devices inside machines, rather than placing them on the outside where they are easy to spot.

The oldest and simplest trick involves a fraudster placing a device into the card slot that allows the card to be read, but stops it being ejected

'Some victims of fraud are not refunded by their bank because it is difficult to prove the transactions were fraudulent if the original card and Pin was used.'

John Westley, 55, recently lost £900 to cash machine fraud after he used a Lloyds machine in Collier Row, Romford, Essex.

He used the machine at 7.30am, but it swallowed his card. Mr Westley reported the incident to Lloyds staff as soon as the branch opened at 9am - but by that point, fraudsters had already withdrawn £250 from a local cash machine and spent a further £650 in shops using mr Westley's card and Pin.

He says: 'When I went back to the branch there was a notice in the window stating: "If this machine takes your card please contact our fraud department" - so the bank obviously knew something was wrong.'

Mr Westley's bank, NatWest, refunded him £250, but he's still waiting for the outstanding £650. A spokeswoman for Lloyds says: 'We take fraud very seriously. Where a suspicious device is reported, we will close the cash machine and inform the police.

'Due to the prevalence of incidents in Romford, staff took preventive measures by inserting a notice in the window to make customers aware of the risks in the area.'

So how do fraudsters target cash machines, and is there anything you can do to prevent yourself falling victim?

Card traps

The oldest and simplest trick involves a fraudster placing a device into the card slot that allows the card to be read, but stops it being ejected. The victim enters their Pin and receives their funds as normal, but then finds that the card will not come out of the machine because it is trapped by a loop.

The fraudster can obtain the Pin simply by observing someone typing in the number, called 'shoulder surfing'.

Quite often they will try to 'help' someone whose card is trapped and encourage them to re- enter the number so they can watch.

They could install a near-invisible Pin camera that records the number being entered.

'This is why it is very important to shield your Pin whenever you use a cash machine,' says Kerry D'Souza, of CPP, the fraud insurer. or they can use a fake key pad, which can be impossible to spot, on top of the genuine keys to capture the Pin.

Mark Bowerman, of Link, says: 'With card traps, the customer gives up on the transaction, thinking their card has been swallowed, and walks away.

'The criminal then removes the device, along with the customer's card, which they use with the Pin to withdraw cash or buy expensive goods in shops.'

Skimming

Every credit or debit card contains two unique pieces of information - a chip and a magnetic strip. Chips are quite difficult for fraudsters to clone, but magnetic strips are relatively easy. Skimming devices attached to the card entry slot capture the magnetic strip details so they can be used on a fake card.

The fraudster captures the Pin by one of the methods listed above, then uses the genuine Pin with the fake card in countries that have not yet upgraded to chip and Pin, such as the U.S.

Victims are very unlikely to realise they have been skimmed until they spot a transaction from another country on their bank statement.

Get your money back

A bank cannot refuse a refund on a fraudulent transaction just because the genuine card and Pin were used. This is enshrined under article 59.2 of the FSA's Payment Services Regulations, which were introduced last November.

Unless the bank can prove that you authorised the transaction or deliberately or carelessly allowed someone else to get hold of your Pin, it must refund your account immediately.

Read about other common frauds to watch out for at www. thisismoney.co.uk/idfraud

• If your bank has refused you a refund, email l.thompson@ dailymail.co.uk or write to Lauren Thompson, money mail, Daily mail, 2 Derry Street, London W8 5TT with details. Please include a daytime phone number.

£400 stolen from cloned card

ALISTAIR WILLIAMS, 24, pictured above, had his card cloned after using an HSBC cash machine in Camden, North London.

Fraudsters spent £400 after they copied the magnetic strip of Mr Williams's card and used it in Italy, which has not yet upgraded to chip and Pin.

Mr Williams, a graphic designer, from Stoke Newington, North London, says: 'After I put my card in the machine, it came back out and then went in again. I thought that was a bit weird, but I didn't think anything else of it.

'A few days later, HSBC rang and asked if it was me making these transactions abroad. When I said it wasn't, they immediately froze my account.'

The bank sent Mr Williams a new card and