Money Smart Week: Madigan alerts consumers to ATM hacking scheme

[April 09, 2014]  CHICAGO — Attorney General Lisa Madigan is alerting Illinois residents to an increased risk of unauthorized withdrawals on their accounts. Banking regulators reported that hackers are circumventing controls on automated teller machines to make nearly unlimited withdrawals before banks can detect the fraud.

In recognition of Money Smart Week and in the wake of the hacking disclosure, Madigan is urging Illinois residents to be on the lookout for unauthorized withdrawals from their accounts. This comes amid a series of massive data breaches at major U.S. companies, including Target and Neiman Marcus.

"This recent wave of cyberattacks reinforces how important it is to monitor your accounts for unauthorized activity, because it's not a matter of if, but when, your financial accounts will be targeted by a criminal," Madigan said.

Late last week, the Federal Financial Institutions Examination Council reported the increase in cyberattacks, disclosing that criminals have hacked bank websites and made large withdrawals from consumers' accounts well before banks' fraud alert systems recognize the unauthorized withdrawals.

The FFIEC said hackers have learned how to delete or alter pre-programmed algorithms set up by banks to alert them to ATM withdrawals that are out of the ordinary. The scam often starts via "phishing" attacks targeting bank employees. The scammers send phony but official-looking emails that include links to initiate a malware attack on the banks' systems, allowing them to obtain employee login information that then enables them to access the banks' ATM control panels. After the hackers alter the algorithms managing the ATM controls, they create fraudulent ATM cards with account information stolen from separate attacks, either using malware or scanning programs at retail sales registers or ATMs, according to the FFIEC.

Hackers attempt to make several withdrawals from the same account at multiple ATMs simultaneously so that the daily withdrawal limit is not detected until the money has already been withdrawn, and the hackers often schedule the withdrawals for holidays and weekends, according to the FFIEC, when extra sums are loaded into ATMs and banks' monitoring is less active. In explaining the scope of the scams, the FFIEC cited a recent ATM attack that netted over $40 million in fraudulent withdrawals using only 12 debit card accounts.

Madigan offered the following tips to help Illinois residents detect and report unauthorized charges:

• Monitor bank and credit card accounts daily online and billing statements every month. Contest unauthorized charges immediately over the phone and in writing.

• Set up an alert on your account to receive notification when your credit or debit card is used over and above a certain dollar figure. Many banks offer this feature as a "transaction alert."

• Beware of callers who claim to be with your card-issuing bank. These calls may be a scam. You should contact your bank first at the toll-free number on the back of your card before disclosing any personal information.

In recognition of Money Smart Week, organized annually by the Federal Reserve Bank of Chicago, Madigan's office is participating in two Money Smart Week Financial Regulators Fairs in Chicago and Springfield. The Springfield fair was in the Capitol's north hall on Tuesday. Chicago's fair will take place on the ground floor of the James R. Thompson Center from 10 a.m. to noon Wednesday.

Madigan's office is also participating in the following events related to Money Smart Week:

• Consumer fraud presentation on Monday evening at the St. Joseph Township-Swearingen Memorial Library, 201 N. Third St., St. Joseph.

• Identity theft panel hosted by Lakeside Bank on Tuesday evening at Holy Family Church, 1080 W. Roosevelt Road, Chicago.

• Senior fraud presentation hosted by FCB Banks from 11 a.m. to noon Wednesday at the Collinsville Senior Center, 420 E. Main St., Collinsville.

• Englewood housing resource meeting from 6 to 8 p.m. Wednesday at the Englewood 7th District Police Station, 1438 W. 63rd St., Chicago.

• Chatham housing resource meeting from 10 a.m. to noon Saturday at the Maryland Avenue Baptist Church, 8058 S. Maryland Ave., Chicago.

For more information on protecting your financial and personal information, visit Madigan's website or contact her office's Identity Theft Hotline at 1-866-999-5630.

[Text from file received from the office of Illinois Attorney General Lisa Madigan]