Australians lost $50m in EFTPOS machines skim scam

27 January 2010

Australians have reportedly been skimmed out of a massive $50 million as the nation faces its greatest wave of skim scams and fraud behaviour on record.

A statement released by the NSW police has stated that international criminal gangs have launched an unprecedented attack on EFTPOS machines located in retailers, convenience stores, fast food outlets and smaller EFTPOS locations. This is the first time that EFTPOS machines have been used to skim credit cards and debit cards, with ATMs the usual targets of these kinds of large gang-style scams. Activities of these gangs have included stealing EFTPOS PIN pads from retailers and being replaced with ';fake' machines.

In fact, one McDonald's store in Perth fell victim to this practice and had their legitimate EFTPOS devices swapped with compromised card-skimming versions. This one particular incident resulted in 3500 customers losing $4.5 million.

NSW Police state that all Australian capital cities and larger regional areas have been targeted in some level.

NSW fraud squad head Detective Superintendent Colin Dyson stated that the skimming attacks were the biggest he had seen with known criminal activity still "ongoing" and based in suburban Sydney and NSW coastal cities.

The police team targeting these crimes, known as NSW Police Strike Force Wigg, had identified "50 persons of interest" from a criminal gang based "in a particular part of Asia". The majority of those identified are living outside of Australia.

To date, six people have been arrested in NSW in relation to the scam but Supt Dyson said that police know that it is a very large, international group involved.

"The members of that group arrive in Sydney and other capital cities in Australia, they travel between capital cities, commit these offences and leave the country again."

"Each has their own roles and functions to play. There are organisers that are in the country from time to time and then go back overseas."

The police have issued a list of recommended behaviours for both consumers and merchants to protect themselves from falling victim to such scams, with Supt Dyson urging people to monitor their PINs closely and change them frequently to minimize the chance of losing all funds on any accounts.

"There is sometimes a lag between PINs being compromised and used," he said.

"If someone whose details are skimmed changes their PIN quickly, the data can be useless to the criminal."

The sheer scope of how much damage one individual can do was made evidently clear in August 200 when the US Justice Department has arrested a man with the largest credit card theft, over 130 million stolen credit card numbers.

In this case the credit card numbers were accessed by hacking into the computer and data networks that act as the support system for major American retail and financial organisations.

Fraud Squad detectives have issued warnings of caution to the public and to be mindful when using EFTPOS terminals, issuing advice from both a consumer and merchant standpoint.

Tips for consumers:

Regularly change your Personal Identification Number (PIN)
Following an EFTPOS transaction check store receipts for any irregularities - ie the store name, details, and location should all match the store from which you made your purchase
Regularly check your bank statements
Be aware of the amount of funds you have in your account
Do not write your PIN anywhere
Cover your PIN when entering it into a terminal
Where possible and if it is available to you, use chip technology
If you have concerns contact your financial institution immediately

Tips for Merchants:

Be aware of the security around your EFTPOS terminals at all times
Ensure the terminals are left in a secure location and do not leave EFTPOS terminals unattended or in plain view of the public when they are not in use.
Regularly check all EFTPOS terminals and ensure that serial numbers are correct

Strike Force WIGG comprises detectives from the State Crime Command's Fraud Squad with assistance from the South West and North West Metropolitan Regions, and was established in June 2009 to investigate skimming offences involving EFTPOS machines.

Back to News Index | Back to Home