"As the U.S. approaches chip adoption the criminals are taking this opportunity to perpetrate as much card present counterfeit fraud as possible before it is no longer viable for them to do so," analytic software firm FICO said in a blog post in May 2015, when the organization first reported on the uptick in fraud.

Fraud: Do not put the bullseye on your credit union 

One reason credit unions have been delaying the capital investment to upgrade to EMV standard ATMs is they've convinced themselves that the risk of fraud isn't great enough. After all, the idea of overhauling a fleet of ATM machines seems disruptive and cumbersome — in addition to being expensive. Is it a worthy endeavor when the likelihood is "slim at the moment" that you'll have to cover financial losses stemming from fraudulent activity? 

Understand, as the number of compliant ATMs increase, noncompliant terminals become more and more attractive to criminals. It is reasonable that your credit union does not want to pay to be the first compliant ATM in your community and at the same time you cannot afford to be the last.

Why not be last? Because today, fraudsters know the EMV liability shift is coming for ATMs and have doubled their efforts to get the easy money while they can. Not surprisingly, the number of ATMs in the U.S. compromised by criminals rose 546% in 2015 as compared with 2014, according to an April 2016 report from FICO.

This is a major problem, especially for small to mid-size credit unions. While most major national financial institutions are ahead of the curve with EMV, smaller, community-based credit unions – which are struggling with plans to transition their ATMs – have become a more attractive target. Thus, credit unions face the potential for unprecedented losses come Oct. 1.

Finally, while $650 represents the average loss per card due to skimming, the actual losses stemming from a major ATM fraud operation are usually much higher because a fraud operation targets card users within a given time period for a single machine, or fleet of machines (in the case of skimming).  

Upgrading to EMV-enabled ATMs allows credit unions to immediately lower their risk of counterfeit fraud. Since chip cards can't be skimmed like their magnetic counterparts, credit unions and their members are less susceptible to identity theft.

Your EMV ATM Solution: Finding the Right Network Partner 

Fortunately for credit unions that aren't ready to invest hundreds of costly manhours in upgrading their ATMs, there is another solution — one that doesn't involve hiring a bulldozer crew to tear down your machines.  

Offloading your ATM management to a third-party EFT network provider can help your credit union meet EMV standards while also removing the burdens of managing a fleet. No more coordinating with multiple vendors while keeping current with regulations and industry changes. Since EMV and other ATM technologies continue to evolve, you'll position your credit union to stay current.  

By pairing up with the right credit union network, your EMV-compliant ATMs deter fraudsters, rather than attract them. At the end of the day, a credit union that has taken steps to prevent fraud, is a much less attractive target for the bad guys — and a much more attractive financial house for potential members.