Think what triggers me is that I watched and episode of CSI recently, ha ha ha good resource eh? Anyhow, a guy placed his reader in front of an ATM reader, so the card would pass through his reader into the ATM (if that makes sense, hard to explain). He had a mini camera looking at the keypad. So basically, the person would use the ATM and get their money, then the thief would review the footage later with the timestamp and match it to the card swipe, write it to a blank card and go use an ATM himself with the info and fake card.
As for payment, I'd be looking at overbilling, and I never do electronics consulting, so charging him my normal consulting rate (which I charge for my field of expertise) would be funny.