Fake ATMs stealing money: police
Police are warning consumers about fake bank machines rigged up to steal their passwords and siphon money from their accounts.
Jane Armstrong of Vancouver was robbed of $2,000. The money was taken out of her bank account after her bank card and PIN had been copied by a fake bank machine.
"By putting my card in that machine and punching in my number, they got everything. I don't know how to protect myself from that," says Armstrong.
- MARKETPLACE: White Label ATMs
Rules governing bank machines allow anyone to own a private bank machine, also called a white label ATM.
White label machines account for a third of all ATMs in Canada.
Private operators can buy the machines and set them up in restaurants and bars. Craig McRae pays another company to hook his machines into the Interac system.
"If a criminal wanted to get into this, it's pretty tricky and it can't go on for long before they're found out," says McRae.
Every time a person makes a withdrawal from a private machine, they're charged fees from $1.50 to $4 which are split between the vendor and the retailer.
The industry is unregulated by government. Micha Weisz says there are strict internal procedures to follow before someone is allowed to run the machines. Weisz' company, TNS Smart Network, acts as a middle agent between the private operators and the Interac system.
"Regulation would not make any difference here," says Weisz. "It's a very sophisticated group that did this and you can have all the rules in the world but it won't stop that sophisticated group."
Some consumer groups warn that banks are getting into the private machine business, making it hard for consumers to avoid both the fees and the free standing machines.
"We need to regulate the way these machines are operated to ensure that there are security policies and privacy protection and that these companies are accountable for these reasons," says Susan Lott with the Public Interest Advocacy Centre.
But Philip Levi, a forensic accountant, says all it takes to rig up a machine is a simple computer program to record the information.
"I'm not sure it can be stopped unless people stop using credit cards and debit cards, which I don't think they will."
The industry says it's working on new systems to catch fraud faster by watching for unusual patterns of activity. Banks say they will refund any money stolen if a robbery can be confirmed.