Probably been already done but haven’t heard of this method. Stems from my original idea (to be entered later as this idea is better or at least more fun) of a: “Credit Card restorer” that can restore a weak magnetic strip.
The thief attaches a device to the ATM that appears to be of banks origin
(same style and colors and bank logo on it). This device is labeled: “Bank's name” Credit Card Cleaner. In fact this device just records your magnetic data which is transmitted wirelessly to a nearby receiver or PDA.
Now the thief stills needs the PIN number. Some options here in increasing technology:
1) Shoulder surf the number as the patron enters on the PIN pad.
2) Affix a “safety mirror” that really allows a thief with binoculars or a camera to record the pin number.
3) The credit card cleaner or another device affixed to machine will record the key presses.
This could be an electronic panel/sheet with cutouts for the ATMs keypad. The device senses the button motions by either sensing the vibration/pressure as keys are pressed or detecting the buttons motion with switch sensors or the detection of reflection of a silver dot painted on the sides of the button. Or a complete button overlay/plastic membrane on top of existing keyboard. It's also possible to pick ups the electical signal, or computer processing change that is generated when a switch contact is made and determine which key (like the CIA/Russian spy device that can pick up what you type on a computer keyboard without a physical connection).