ATM Security Risks

Today, I read an article about a man who used and mp3 player that can record sound, to record the phone line transmissions from ATMs in shops and bars.  http://www.theregister.co.uk/2006/11/18/mp3_player_atm_hack/  While the headline is catchy because it uses the term "mp3 player," the important thing is that the phone line was accessible and the tones recorded.  The recorded tones were then decrypted and used to clone cards, complete with the PIN numbers.

This type of fraud isn't unique to the machine itself.  There are many scams for ATMs (as you can see from the Register's associated links).  Even more scary was the coverage of a Russian crime ring a while back that legitimately licensed a chain of independent ATMs (the kind you find all of the place that aren't associated with a specific bank and have steep transaction fees) and turned out to be swiping all of the customer data for ATM card cloning & identity theft. 

I think that given the relative ease to commit fraud, a simple rule of thumb to lower exposure to risk is to only withdraw funds from established bank ATMs except in the rare "emergency."