Interactive Teller Machines: Don’t Let Fraud Get You Down!


As technology continues to advance, so do the methods used by criminals to commit fraud. One area where this is particularly evident is with Automated Teller Machines (ATMs) and Interactive Teller Machines (ITMs).

These convenient machines have made banking easier for many people, but they also present opportunities for fraudsters to steal personal and financial information. It is important for credit unions to keep this in mind when configuring their ITMs and weighing the pros and cons between security and convenience. To help your credit union make informed decisions, here are some things to take into consideration.

Understanding fraud associated with ATMs and ITMs


Skimming is one of the most prevalent forms of ATM and ITM fraud. It involves installing a small device, called a skimmer, on the card reader of an ATM or ITM. This device captures the information stored on your card’s magnetic stripe when you insert it into the machine. Fraudsters can then use this information to create counterfeit cards or make unauthorized purchases.

What can your credit union do to minimize skimming?

  • Minimize skimming by creating regular vision checks on their ATM/ITMs. Have staff inspect the card readers for signs of tampering, such as loose or unusual attachments.
  • Install anti-skimming devices or stickers that warn about skimming and/or give a clear vision that tampering may have occurred. For more information on those, I recommend reaching out to your ATM/ITM provider.
  • Turn on ATM/ITM transaction monitoring to send emails letting your staff know of high dollar amounts being withdrawn from an ITM in a set timeframe.

Magstripe vs chip cards

Maintaining support for Magstripe cards is much riskier than chip cards. Magstripe cards can easily be skimmed and duplicated. Allowing bad actors to withdraw money directly from ATMs and ITMs with the duplicated cards. Most ITM/ATMs can turn off magstripe support. If most of your cold holders have chips, this might be a good option for your credit union. This would also stop most risks associated with skimming as well.

Stay informed when it comes to ATM/ITM fraud. Join vendor groups and form alliance with other financial institutions to ward off future threats. Use their experiences to help protect your credit union.

Understand members’ expectations and weigh the risks

When you get a new tool with new feature sets, we all get excited about the new features we can provide for our members. Just remember, that with new tools, comes new risk associated.

Many credit unions use ITMs to try to minimize the use of tellers. When doing so, they think about all the reasons why a member would need to withdraw or deposit cash and checks. Because they are thinking about how this machine could replace the teller, they believe that the machine should be able to do things a teller did before.

An example of this would be, letting your members withdraw $5,000 per day through ATM\ITMs. Most members don’t require that amount of cash to be withdrawn outside of a couple of times a year. Because of that, does it make sense for your credit union to take such a risk if bad actors were to skim 50 cards and steal $250,000? I highly recommend thinking through your limits and options to decide what is best for your credit union.

ITMs that offer video tellers give credit unions lots of options to avoid fraud. Limits can be set to call a teller to verify high transaction dollar amounts. So instead of freely giving access to $5000 with no supervision, the member could request that dollar amount, which instantly calls a teller for verification. After the teller verifies the member, the money can be withdrawn. This can reduce the risk associated with having a high withdrawal allowance and give your member some freedom to access a large amount of cash from your ITMs.

Use with caution

In conclusion, while ATMs and ITMs offer convenience and accessibility, they also present opportunities for fraudsters to exploit our credit unions. By staying vigilant and following these tips, you can protect your members from becoming a victim of ATM and ITM fraud.


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