Cash machine scams are on the rise - and banks want to blame you

People are being increasingly targeted by criminals at cash machines, according to new figures from Financial Fraud Action UK. Fraud at ATMs rose by one fifth to £32.7m last year.

The common scam is for two people to approach you at an ATM. One is the distractor and the other the thief. The first person will do something to distract you then while you are distracted the other person swaps your bank card, having already watched you enter your pin.

They can then withdraw as much money as they like from your account, until, of course you cancel the card.

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The worrying element about ATM scams is that the banks are increasingly placing the blame on customers when it happens.

“It’s still the bank’s job to safeguard clients’ money,” says Richard Dyson in The Telegraph. “But…anyone who glances at their bank account terms and conditions booklets (no one could read all that in its entirety, surely?) will see that there are more and more conditions to be met if you are going to be regarded by your bank as using your account ‘responsibly’.

"If you fail to meet these requirement, you can expect to get landed with the loss if you’re the victim of fraud.”

Along with its warning about ATM scams Barclays has released a list of tips to avoid it happening to you, making it clear that it believes the responsibility lies with the customer.

Don’t let anyone distract you at a cash machine, the bank advises. Cover your pin, don’t use a cash machine if it, or anyone near it looks suspicious, and call your bank straightaway if you think your account security has been compromised.

But most experts say banks need to start taking more responsibility.

In one case Lloyds refused to refund a customer who had been robbed while she was using a cash machine inside one of their branches. A man lurked inside waiting for a victim and then distracted the woman and stole £500 from her account. It took the intervention of a journalist from The Times, before Lloyds accepted it was at fault and refunded the cash.

“I could scarcely believe my eyes when I read that Lloyds was refusing to compensate you,” says Jill Insley, who tackled the problem in The Times. “Regardless of whether the crime was theft or fraud, it took place inside one of the bank’s branches.”

“If banks are going to make us more responsible for losses arising out of the misuse of our accounts, they need to play their part,” says Dyson. He lists two ways banks need to up their game.

Firstly, it needs to be easier to report fraud and it be treated more urgently.

“We’ve written about too many cases where huge sums are at stake, yet, banks adopt a lackadaisical approach as if, say, the customer were requesting a new paying-in book.”

Secondly, there needs to be a better system for confirming large and unusual transactions are genuine. “If banks can suspend your card because you try to buy a coffee while on holiday in Spain, why can’t they text or call you to ask whether you’re absolutely certain of the destination of an unusually large payment?”

Until the banks step up to take more responsibility for keeping their customer’s cash safe it is on us to protect our money. So, be on your guard when you use a cash machine. Don’t be distracted, cover up your pin, and store your bank’s fraud number in your phone so you can report anything as quickly as possible.