Old ATM technology skims bank customers

Outdated banking technology has made Australia a prime target for international ATM skimming gangs, police say.

Tens of millions of dollars are lost in Australia each year as a result of card skimming.

"The offenders are telling us that they are targeting Australia specifically because of the level of technology we have," says Detective Superintendent Colin Dyson, commander of the NSW fraud squad.

"The technology is outdated, and they know it."

He said criminal gangs were exploiting Australia's use of magnetic strip technology on bank cards, which was inferior to chip-and-pin technology used in other countries.

"The chip is, in essence, a computer in itself and that talks to the ATM and if the conversation that the card has with the ATM is not correct, no transaction can be conducted," Det Supt Dyson said.

"No ATM in Australia is currently chip-and-pin enabled. It should have been rolled out by now."

Det Supt Dyson made the comments outside the 2010 National Identity Crime Symposium in Brisbane.

Detective Inspector Bruce Shadbolt of Auckland police said New Zealand was also behind in its card technology.

He said criminals would also be looking for ways around the chip technology.

"It's only as good as the way ingenious people are able to get round some of this," he said.

Detective Superintendent Brian Hay of Queensland police agreed, saying hackers competed with each other, graded one another's work and shared codes.

"It's an arms race, effectively an arms race in the technology, and crime's leading the charge unfortunately," he said.

"They are constantly looking for ways to beat the current systems."

The police officers' repeated warnings to cover ATM keypads when entering a pin, to check bank statements, and to inform the bank of the itinerary when undertaking overseas travel.

The Australian Bankers' Association (ABA) said banks guaranteed to return any money lost in card-skimming incidents.

"If the customer is an innocent victim of fraud, then the banks will refund losses," said Ian Gilbert, ABA acting chief executive.

He said the rollout of chip-and-pin technology involved more than banks.

EFTPOS technology should be upgraded by 2014 and ATMs within two or three years, Mr Gilbert said.

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