I keep hearing about ATM fraud. How serious a problem is it? And what can I do to protect myself?

Simply put, ATM fraud involves unauthorised withdrawals of money from a bank account via automated teller machines.

In recent years, criminals have become increasingly sophisticated. They don't even need to steal an actual ATM card to clean out an account. Instead, they can modify an ATM to skim the personal data electronically encoded on a card when it is used.

"Generally, skimming is the placing of a parasitic device onto the ATM's card reader that enables the download and transmission of information that you swipe. This usually works in conjunction with a hidden camera to watch you enter your PIN" or personal identification number, said Kurt Helwig, executive director of the Electronic Funds Transfer Association, an industry group. "Then the thief goes and manufactures a bunch of false cards and uses them and the PIN."

Thieves can also use what's called "shoulder surfing," which involves someone looking over your shoulder while you enter your PIN at an ATM.

Helwig estimates financial institutions lose roughly $50 million a year to ATM fraud ? a fraction of the $1 trillion a year dispensed annually from ATMs.

The good news for consumers, he said, is that the law limits the liability of ATM fraud victims to $50. That means financial institutions and specialised companies that operate cash machines have to reimburse fraud victims for any loss above $50. Some cover the entire theft if it's reported promptly.

"Whether it's an ATM card transaction or debit card transaction, you're protected," Helwig said.

ATM manufacturers are working on technologies to prevent theft but, until they're available, it pays to be cautious.

Sometimes, the fraud is so clever that consumers can't tell anything is wrong, said Ann All, editor of ATMmarketplace.com, an online industry trade publication. In other situations, there are red flags ? such as a one case where thieves used a handwritten sign instructing ATM patrons to swipe their card in what turned out to be a bogus card reader.

"Your best bet is to just look at the machine," All said. "If something looks odd to you or not right, it's probably best not to use the machine at all, or to call your financial institution or the telephone number that is posted on the machine and let them know."

It's a good idea to make sure no one is standing too close when you type in a PIN and to be suspicious of someone who seems too helpful. Thieves have been known to jam one ATM machine and then direct consumers to another, where a skimmer has been installed.

Although many financial institutions limit daily withdrawals at a few hundred dollars, all a thief needs is a few days to wipe out an account. Consumers should always try to get a receipt when they use an ATM and check their bank account statements so they know what's in their account.

Finally, All notes that ATM fraud can occur anywhere, whether in a bank lobby or a convenience store.

"If I'm a skimmer, am I going to go to a machine that records 6,000 transactions a month or 250? I'm going to go to a machine with 6,000 transactions, which is in a bank," she said. "The security there may be better, but I can make more money." ?? Associated Press