DEFINITION of ‘PIN Cashing’
A type of fraud in which a stolen credit card or debit card is used to gain access to the cardholder’s bank account. PIN cashing typically involves the use of an automatic teller machine (ATM) to withdraw funds once the card’s personal identification number (PIN) is identified. It is a type of cybercrime, and is the result of a data breach during card processing.
BREAKING DOWN ‘PIN Cashing’
One of the most common security features of debit cards is the personal identification number (PIN), a multi-digit number that is created by the cardholder. When the cardholder inserts or swipes the debit card at an ATM or makes a purchase at a store, he or she is often required to type in the PIN into the terminal in order for a transaction to be processed.
There are a number of different ways that a both the card’s number and security PIN can be stolen. The most common route for fraud is through electronic systems, specifically computer systems. Hackers that gain access to a computer system of a financial service provider or other businesses that process transactions electronically may steal confidential account information. Institutions are often targeted if they have weak security systems and processes in place, and in some cases hackers are able to remove withdrawal limits by manipulating security system settings.
Once the confidential card information is stolen, hackers often employ a network of individuals called cashers, to make a large number of withdrawals before banks are able to cancel the card. Cashers may be located all over the world, and are not limited to the country of the cardholder. Purchases made on-line do not require the physical card to be used, which is why the Internet is a popular place to use stolen cards. Cashers may also use physical ATMs if they can print the stolen information onto another card.