CUNA Mutual Group Risk Alert: Non-EMV Enabled ATMs Targeted

Fraudsters are increasingly targeting non-EMV enabled ATMs with counterfeit cards. The resulting losses are uninsurable. In addition, credit unions operating non-EMV enabled ATMs are at greater risk to large losses due to MasterCard and Visa’s liability shift.

Credit unions are liable for the chargeback if fraud occurs at their ATM and the ATM is not validating EMV or the credit union’s non-EMV card is used at another financial institution’s ATM that is EMV enabled. MasterCard and Visa’s liability shift for non-EMV enabled ATMs went into effect over one year ago. Credit unions that have upgraded ATMs to be EMV-enabled have successfully minimized the liability and risk associated with this type of ATM fraud.

However, some credit unions are reporting losses at their owned ATMs because EMV card readers on the ATMs were installed, but not turned on. Typically, the ATM processor must validate and code the transaction as EMV. This oversight resulted in over $800,000 of uninsured losses reported to CUNA Mutual Group in 2018.

Fallback transactions – where the credit union allows the transaction to fallback to the magnetic stripe on EMV cards – have also been an issue. Fraudsters quickly pick-up on card issuers that haven’t turned off the fallback option and use this to their advantage.

Risk Mitigation
Credit unions should consider these mitigation tips:

  • Ensure all ATMs are EMV-enabled and ready to accept chip cards by consulting with your ATM vendor.
  • Check with your processor to ensure that all of your ATMs have EMV turned on and verify transactions are being coded for EMV.
  • Limit non-member ATM usage to prevent additional liability until your credit union moves to EMV-enabled ATMs.
  • Adopt or review fallback strategies and ensure proper coding.
  • Conduct regular inspections (daily is suggested) of your credit union’s ATMs. Look specifically for foreign skimming and shimming devices that may have been added to your machines.

Risk Prevention Resources
Access CUNA Mutual Group’s Protection Resource Center at for exclusive risk and compliance resources to assist with your loss control. The Protection Resource Center requires a User ID and password. Review these resources to learn more: