What is a significant risk associated with ATM transactions in terms of fraud?

Fraudulent withdrawal activity with stolen cards poses a significant risk in ATM transactions. This type of fraud occurs when unauthorized individuals gain access to someone else's card information, often through methods such as skimming devices attached to ATMs, phishing schemes, or data breaches. Once they have this information, they can create a duplicate card or use the card details to withdraw money from an account without the account holder's consent.

The nature of ATMs, which allow for quick and anonymous transactions, makes them particularly vulnerable to this kind of fraudulent activity. Additionally, the speed at which these transactions can occur means that victims often do not have adequate time to react or report the theft before significant losses can ensue. This highlights the importance of customers monitoring their accounts regularly and banks implementing robust security measures to protect cardholder information.