How to Safely Use an ATM and Avoid Card Fraud — A Complete Guide
Learn how to spot a tampered ATM, protect your PIN, and avoid card fraud with this plain English guide.
6/12/202611 min read
How to Safely Use an ATM and Avoid Card Fraud — A Complete Guide
Category: Banking and Financial Safety | Reading Time: 11 minutes
In This Article
How ATM card fraud actually happens
What card skimming is and how to spot it
What to check before using any ATM
Safe habits at the ATM — what to do and what to avoid
ATM fraud in India — specific risks and protections
What to do if your card is compromised
Frequently asked questions
Millions of people use ATMs every single day without a second thought. Most of the time, the transaction is entirely safe. But ATM fraud — particularly card skimming — is a growing and sophisticated threat that affects hundreds of thousands of people every year across the world.
According to the FBI, ATM skimming costs financial institutions and consumers more than one billion dollars every year in the United States alone — and law enforcement agencies continue to dismantle organised skimming operations across the country on a regular basis.
Source: https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams/skimming
FICO, the analytics firm that tracks card fraud data across financial institutions, identified more than 231,000 US debit cards compromised by skimming in 2024 alone — a number that reflects a sharp and ongoing rise in skimming activity.
Source: https://finance.yahoo.com/personal-finance/banking/article/what-is-atm-skimming-170528226.html
In India, the Reserve Bank of India's Annual Report records thousands of card-not-present and card-present fraud cases annually, with ATM-related fraud consistently among the most reported categories of banking fraud.
The good news is that ATM fraud is largely preventable. The risks are well understood, the warning signs are visible, and the protective habits are simple. This guide gives you everything you need to use any ATM safely.
How ATM Card Fraud Actually Happens
ATM card fraud takes several forms — but the most common and damaging is card skimming. Understanding how it works is the foundation of protecting yourself against it.
What Is Card Skimming?
Card skimming occurs when criminals illegally install devices on ATMs to capture card data and record cardholders' PINs. The FBI defines skimming as placing an electronic device on an ATM that scoops information from a bank card's magnetic strip whenever a customer uses the machine.
Source: https://www.fbi.gov/news/stories/atm-skimming
The stolen data is used in two steps:
Step 1: The skimming device copies the information stored on the magnetic strip of your card — your card number, expiry date, and account details.
Step 2: A hidden camera or a fake overlay keypad records your PIN as you enter it.
With both pieces of information, criminals encode the stolen data onto a blank card — creating a perfect clone of your card — and use it to withdraw cash from ATMs before you know anything has happened.
The US Secret Service arrested five defendants in February 2024 for installing skimming devices and cameras on ATMs across New York, compromising over 600 victim accounts. Prosecutors confirmed that the defendants transferred data onto counterfeit debit cards and used them to make purchases and withdraw cash from victims' accounts.
How Skimming Devices Are Installed
According to the FBI, skimming devices are typically installed for short periods — sometimes just a few hours — and are often attached to an ATM by nothing more than double-sided tape. They can be:
A card reader overlay — a fake card reader placed directly over the real card slot, capturing data as the card passes through.
A false keypad — a fake keypad placed over the real one, recording every keystroke as customers enter their PINs.
A hidden pinhole camera — positioned above or beside the keypad to film PIN entry.
An internal device — installed inside the machine itself by criminals who gain access to ATM components.
Source: https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams/skimming
Shoulder Surfing
A simpler but still common form of ATM fraud requires no devices at all. A criminal stands close enough to an ATM user to observe their PIN being entered — either directly or using a phone camera — and then steals or distracts the victim to take their card. Always be aware of people standing unusually close to you at an ATM.
Distraction Fraud
A team of criminals work together — one person engages the ATM user in conversation or creates a distraction at the moment of PIN entry while another observes the PIN or swaps the card. This method is particularly common in high-footfall locations such as shopping centres and transport hubs.
What to Check Before Using Any ATM — The Physical Inspection
The FBI specifically advises inspecting any ATM, fuel pump, or card reader before using it and remaining suspicious of anything that looks loose, crooked, or damaged.
Source: https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams/skimming
Before inserting your card, spend fifteen seconds checking the following:
Check the Card Slot
Gently push and pull the card slot with your fingers. A legitimate card reader is firmly fixed to the machine. If the card slot feels loose, moves, wobbles, or looks like it has been glued on — do not use the machine.
Look at the colour and finish of the card slot. If it looks different from the rest of the machine — a slightly different shade, a different material, or visible adhesive residue around the edges — it may be an overlay.
First Alert reported the FBI's warning that if an ATM's card slot feels wobbly or sticks out more than usual, those are red flags that a skimmer has been placed on the machine.
Check the Keypad
Press a few keys before entering your PIN. The keypad should feel firm and responsive. If it feels spongy, unusually thick, or sits higher than expected above the ATM's surface, it may be a false keypad overlay placed over the real one.
Check whether the keypad looks like it matches the rest of the machine. If the style, colour, or material looks different from the surrounding panel, be suspicious.
Look for Hidden Cameras
Look above and beside the keypad for any unusual attachments — small holes, bulges, or plastic housings that do not seem to belong to the machine's original design. Cameras are often hidden in plastic strips positioned to capture a view of the keypad.
Check the ATM's Overall Appearance
Step back and look at the machine as a whole. Does anything look out of place, added on, or inconsistent with the rest of the machine's design? Skimming devices are often detectable to a careful eye because they are physically added to a machine that was designed without them.
If anything about the ATM makes you uncomfortable — even if you cannot identify exactly what seems wrong — trust your instinct and use a different machine.
Safe Habits at the ATM — What to Do and What to Avoid
Always Cover the Keypad When Entering Your PIN
This is the single most effective protective habit at any ATM. Covering the keypad with your other hand while entering your PIN blocks any hidden camera from capturing your PIN — even if a skimming device has been successfully installed on the machine.
The FTC, the FBI, and JP Morgan Chase all specifically recommend covering the keypad as a primary protective measure. Even if the card data is stolen by a skimmer, your PIN is still required to make a withdrawal — and a covered PIN cannot be filmed.
Source: https://www.jpmorgan.com/insights/fraud/card-fraud/how-to-protect-yourself-from-debit-card-fraud
Source: https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams/skimming
Prefer ATMs in Well-Lit, High-Visibility Locations
ATMs inside bank branches — particularly those with security cameras and staff — are significantly lower-risk than standalone machines in quiet or isolated locations.
When possible, use ATMs located inside a bank, in a busy supermarket, or in a well-monitored public location.
Be Aware of Your Surroundings
Before approaching an ATM, look around.
Is anyone standing unusually close?
Is someone waiting who does not appear to be queuing?
Is anyone trying to watch your transaction?
Be particularly cautious if someone offers to help you with the machine, engages you in unexpected conversation, or tries to distract you during your transaction.
Do Not Accept Help From Strangers
A common distraction fraud technique involves a stranger approaching an ATM user and offering to help — sometimes claiming the machine has a known fault or that they saw it malfunction for the previous user.
Do not accept assistance from anyone at an ATM who you did not ask for help.
Memorise Your PIN — Never Write It Down
Your PIN should exist only in your memory.
Never:
Write it on paper
Save it in your phone notes
Store it in your wallet
Keep it anywhere near your card
A stolen card without a PIN cannot easily be used at an ATM. A stolen card with a written PIN gives criminals immediate access.
Set Transaction Alerts on Your Bank Account
Most banks allow you to enable SMS or email notifications for every transaction on your account.
Activating these alerts means that if a fraudulent transaction occurs, you are notified in real time and can contact your bank before further withdrawals are made.
First Alert reporting on FBI guidance specifically recommends setting up account alerts.
Use Tap-to-Pay or Chip-Enabled Cards Where Possible
FICO's research confirms that EMV chip cards and contactless tap-to-pay technology are significantly more resistant to skimming than traditional magnetic stripe cards.
Whenever possible:
Use chip transactions
Use contactless payments
Avoid swiping the magnetic stripe
Source: https://finance.yahoo.com/personal-finance/banking/article/what-is-atm-skimming-170528226.html
Check Your Statement Regularly
Review your bank statement at least once a week for transactions you do not recognise.
Criminals often perform small "test transactions" first before making larger withdrawals. Catching suspicious activity early can significantly reduce financial losses.
Withdraw Cash During Daylight Hours
Where possible, use ATMs during business hours when more people are present.
Skimming devices are often installed during quieter periods and removed before or after banking hours. High-footfall times provide both a deterrent to criminals and more witnesses if something goes wrong.
ATM Fraud in India — Specific Risks and Protections
India has seen a significant rise in ATM-related card fraud in recent years.
The RBI's Annual Report for FY 2024–25 recorded digital payment fraud accounting for 56.5 percent of all reported banking frauds, with card-present fraud at ATMs among the leading categories.
Source: https://indiadatamap.com/2025/10/11/online-fraud-in-india-2025-analysis/
The Fake Helpline Fraud at ATMs
A fraud commonly reported in India involves criminals placing stickers on or near ATMs displaying fake customer support numbers.
When a genuine customer experiences a problem:
Card gets stuck
Cash is not dispensed
Transaction fails
they call the number shown on the sticker.
The criminal who answers pretends to be a bank representative and asks for:
Card number
PIN
OTP
Personal details
The information is then used to commit fraud.
The RBI advises customers to use only:
Helpline numbers printed on their bank card
Contact numbers listed on the bank's official website
Never trust numbers displayed on stickers attached to ATMs.
Source: https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2110405
Card Trapping
In card trapping fraud, criminals insert a device into the card slot that prevents the card from being returned after the transaction.
A nearby criminal then:
Pretends to be a helpful bystander.
Claims the ATM has swallowed cards before.
Offers assistance.
Attempts to learn or observe the PIN.
Once the victim leaves, the criminal retrieves the trapped card and uses it together with the stolen PIN.
If your card is retained by an ATM:
Do not share your PIN.
Do not accept help from strangers.
Contact your bank immediately.
Block the card if necessary.
RBI Consumer Protection
Under RBI guidelines, customers who report unauthorised ATM transactions promptly may be eligible for reimbursement.
General guidance includes:
Report within 3 days: potential zero liability for the customer in eligible cases.
Report within 7 days: partial protection may still apply depending on circumstances.
The fastest response is:
Call your bank's fraud helpline immediately.
Block the card.
File a complaint at cybercrime.gov.in.
Contact the National Cyber Crime Helpline at 1930.
Source: https://www.cybercrime.gov.in
What to Do If Your Card Is Compromised
Step 1: Contact Your Bank Immediately
Call your bank's 24-hour fraud helpline and request that your card be blocked immediately.
The sooner the card is blocked, the lower the chance of additional losses.
Step 2: Request a Replacement Card
Do not simply unblock the compromised card.
Request:
A new card number
A new card
A new PIN
Once card details have been stolen, the old card should never be trusted again.
Step 3: Review Recent Transactions
Check all recent account activity carefully.
Look for:
Small test transactions
Cash withdrawals
Online purchases
Transfers you do not recognise
Report every suspicious transaction to your bank.
Step 4: Change Passwords and PINs
Update:
Internet banking passwords
Mobile banking passwords
ATM PINs
Any other accounts sharing the same credentials
Using the same PIN across multiple accounts creates additional risk.
Step 5: File an Official Complaint
In India, report fraud through:
National Cyber Crime Helpline: 1930
Cyber Crime Reporting Portal: https://www.cybercrime.gov.in
You should also consider filing a police report if required by your bank's claims process.
Step 6: Monitor Your Credit Profile
Continue monitoring your financial accounts for several weeks.
ATM fraud can occasionally be linked to broader identity theft attempts.
Warning signs include:
New loans
Credit card applications
Accounts opened in your name
Credit enquiries you did not authorise
Frequently Asked Questions
How do I know if an ATM has been tampered with?
Look for anything that appears to have been physically added to the machine, especially around the card slot and keypad.
Common warning signs include:
Loose or wobbly card slots
Card readers that protrude more than usual
Unusually thick keypads
Spongy keypad buttons
Small plastic attachments near the keypad
Unfamiliar holes or housings that may conceal cameras
The FBI recommends inspecting ATMs before use and avoiding any machine that appears suspicious.
Source: https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams/skimming
Is Covering the Keypad Really Effective Against Skimming?
Yes.
Covering the keypad with your free hand while entering your PIN prevents hidden cameras from recording it.
Even if criminals successfully capture your card data through a skimming device, they still need your PIN to withdraw cash.
This simple habit blocks one of the most important pieces of information criminals require.
Are ATMs Inside Banks Safer Than Standalone Machines?
Generally, yes.
ATMs located inside bank branches are usually:
Protected by CCTV systems
Monitored more frequently by staff
Inspected regularly for tampering
Less accessible to criminals during off-hours
Standalone ATMs located in isolated or poorly monitored areas typically carry a higher risk.
What Should I Do If My Card Gets Stuck in an ATM?
If your card becomes trapped:
Do not leave immediately.
Do not share your PIN with anyone nearby.
Do not accept help from strangers.
Call your bank using the phone number printed on the back of your card.
Request that the card be blocked if necessary.
Criminals sometimes use card-trapping devices and then pose as helpful bystanders to obtain your PIN.
Can Chip Cards Be Skimmed?
Chip cards are significantly more secure than magnetic stripe cards.
The EMV chip generates a unique code for each transaction, making it extremely difficult for criminals to clone successfully.
However, most chip cards still contain a magnetic stripe for compatibility purposes, and that stripe can sometimes be skimmed.
This is why:
Covering your PIN remains important.
Monitoring account activity remains important.
Using contactless payments where available is recommended.
Should I Report a Suspicious ATM Even If I Did Not Use It?
Yes.
If you notice signs of tampering, report the ATM to:
The bank that owns the machine
Local law enforcement if appropriate
Your report could help prevent dozens of other users from becoming victims before the device is removed.
Can ATM Fraud Happen on Mobile ATMs or Temporary Machines at Events?
Yes.
Temporary and mobile ATMs are often considered higher-risk because they may:
Have less security monitoring
Lack permanent surveillance systems
Be easier for criminals to access
Apply the same safety checks to every ATM regardless of location.
Always:
Inspect the card slot
Inspect the keypad
Cover your PIN
Stay aware of your surroundings
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The Bottom Line
ATM fraud is not a threat that can be ignored.
As the FBI reports, skimming alone costs consumers and financial institutions more than one billion dollars annually, while industry data continues to show increasing numbers of compromised cards every year.
Fortunately, the most effective protective measures are simple:
Inspect the ATM before use.
Cover the keypad every time you enter your PIN.
Prefer ATMs located inside banks.
Enable transaction alerts.
Monitor your account regularly.
Report suspicious activity immediately.
Most ATM fraud schemes require two pieces of information to succeed:
Your card data
Your PIN
Protect your PIN and you significantly reduce the criminal's ability to use stolen card information.
A few seconds of caution at the ATM can prevent months of inconvenience, financial loss, and stress.
Share this guide with family members and friends who use ATMs regularly. The habits outlined here take only moments to learn but can provide long-term protection against one of the most common forms of financial fraud.