Skimmers scan credit card magnetic strips for account information and are usually accompanied by a pin camera to record the PIN as it is being typed.  To better hide the skimmer they are being inserted into the ATM machine slot.  Krebs reports: http://krebsonsecurity.com/  (Skimmers have also appeared inside gas pumps -- unlike ATMs gas pumps are easy to open.)

Here is a posting about finding a skimmer in Bali.  The details are interesting: https://trustfoundry.net

He found it because he jiggles ATM pieces to test for skimmers and cameras -- they are designed to be easily snapped into place and retrieved.

Takeaway: use your free hand to cover the keyboard as you type in your PIN