Tips to safeguard your money from ATM, POS fraudsters

Skimming refers to a form of scam which is perpetrated by installing illegal devices on ATMs, point-of-sale (POS) terminals, or fuel pumps to capture data or record cardholders’ passwords.

For several years, the Nigerian banking system thrived on over-the-counter transactions, resulting in long queues in the banking hall. But things have pretty changed with the embrace of some technologies that have helped shape the financial sector in the past three decades.


It started with the introduction of automobile functional Automated Teller Machine systems in 1989. With this technology, the pressure on the banking halls was lessened because customers now carry credit and debit cards that can be used at the nearest ATM stand.

As a leap forward in 2012, the Central Bank of Nigeria (CBN) introduced the cashless policy to ease financial transactions and reduce the flow of cash.


This policy, among other things, birthed the introduction of the Point of Sales (PoS) system, which has now become prominent in Nigeria’s banking system. The PoS has also impacted the retail services because vendors across all boards now have their personalised machines.

In fact, data from the Nigeria Inter-Bank Settlement System showed that the value of POS transactions reached N6.4tn in 2020. Likewise, Statista, an online portal that provides data on the global digital economy and trends, says the number of POS terminals in Nigeria has surpassed 1 million as of 2022.

But Nigerians have been forced to part away with their hard-earned money as fraudsters and scammers leverage ATMs and PoS terminals to swindle unsuspecting victims.


Yusuf Kolawole, a secondary school teacher in Ibadan, Oyo state, lost N80,000 to PoS fraudsters in 2021.

Kolawole had gone out to make a withdrawal of N20,000 out of his salary. He never envisaged that the POS outlet he patronisedwould be the point where he would be fleeced of his savings.

According to him, within thirty minutes, he was scammed and by the time he went back to the point of withdrawal, the POS operator had fled.


“I was expecting some money from my salary and when it came, I went to the POS to withdraw N20,000 for something I needed urgently. When I came back from the POS, 30 mins before, N80,000 had gone. I rushed down to the place, the man was nowhere to be found,” he said.

Like Kolawole, many Nigerians have fallen victims to this or other emerging forms of ATM/Pos fraud. According to a report by Forbes, the rise in cashless POS transactions is not lost on hackers, scammers and cyber-criminals because of the alarming data theft.

How Skimming is perpetrated

ATM skimmer devices usually fit over the original card reader. Also, some ATM skimmers are inserted in the card reader, placed in the terminal, or situated along exposed cables.

In some cases, cameras installed on ATMs record a customer entering their PIN or keypad overlays are used instead of pinhole cameras to record PINs. The keypad overlays record a customer’s keystrokes, thus making data stored to be downloaded or transferred later.

This usually happens in supermarkets, malls, petrol stations and places where retail services are offered. It is believed that the fraudsters use the stolen data to create fake debit or credit cards and ultimately steal from victims’ accounts.

The FBI estimated that this form of fraud costs financial institutions and consumers more than $1 billion (N453 trillion) annually.

Tips to prevent skimming

Choice of retail shops and petrol stations: It is advised that one chooses a retail shop or petrol station that is closer to one’s area and directly under the supervision of an attendant. These stores are less likely to be targets for skimmers.

Patronise traditional banks: This offers a level of security as opposed to the use of Fintech banks, most of which do not have a physical office. Traditional banks also perform routine checks on their machines.

Inspection: Check the ATMs and POS terminals properly before using. Anything crooked, damaged, or scratched may suggest that you are at risk. It is also advisable to use ATMs in a well-lit, indoor location, which are less vulnerable targets.

Protect your details: While operating the ATM/PoS, cover the keypad when you enter your PIN.

Report: Contact your financial institution if the ATM doesn’t return your card after use or you suspect that something isn’t right.

Afolabi Michael Oluwole is a Managing Partner at Robbin Michael Consulting and Risk Advisory Services


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