FTC: Fraud more likely than brute crime at your local ATM

ATM machines may attract cyber crime over physical transgressions

ATM fraud is more common and likely than crime committed directly against customers who are in the process of attempting to withdraw cash from the machines. 

That was one of the few concrete conclusions from a report about the use of emergency technology at ATMs issued today by the Federal Trade Commission.  

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At best the FTC said there is anecdotal evidence that brute crimes such as robberies or murders occur more often around ATM machines.  The fear of such activities has lead to a number of emergency technologies that could be installed in and around ATM to help customers who have been or feel threatened.  

These technologies include emergency-PIN entry systems that let a distressed customer at an ATM to enter some variant of their regular bank card PIN in the keypad to electronically alert a law enforcement agency; and alarm buttons users can push when threats arise. 

The issue is that hardly any banks have implemented any such technology, the FTC stated. That may be because while there is no precise data on ATM crime, violent crime against ATM users is relatively rare, the FTC stated. Over the decade of the 1990s, ATM crime has actually decreased from approximately one crime per one million ATM transactions to one crime per 3.5 million transactions. 

Several small cities have mandated the installation of alarm buttons along with surveillance cameras on all ATMs that operate within their jurisdictions. SafeAlert Systems told the FTC that three cities outside Cleveland, Ohio, that do: Broadview Heights, Brooklyn, and Strongsville. The FTC staff also identified another small municipality that has mandated the adoption of ATM alarm buttons, the Sharon Hill Borough in Delaware County, Pennsylvania. 

There are other reasons such systems may not be in wide use.  For example, PIN-based systems may in some instances increase the danger to customers who are targeted by offenders.  Banks responding to the FTC stated the belief that the real risk of customers fumbling to put in their PIN in reverse would result in a greater likelihood of personal harm befalling the customer if the perpetrator perceives the ATM customer as attempting to stall. 

The FTC noted to that law enforcement agencies do not have the computer capacity to provide the necessary real time communication with an ATM. Many police 911 units respond only to voice communication, although some are now taking calls via the internet. In addition, there is no assurance of immediate response by police agencies. This may result from the huge number of calls handled in urban areas to the geographic separation that occurs in rural locations, the FTC stated. 

And of course costs are an issue.  The physical reconfigurations needed to make changes to machines have been estimated at $1,500 to the thousands of dollars per ATM. 

False alarms too are an unintended consequence associated with alarm button technologies. Banks cite the frequent occurrence of "false alarms" as one of the major shortcomings associated with these devices. A Wells Fargo's alarm button pilot program produced 500 false alarms and no legitimate ones, the FTC stated. 

The Credit Card Accountability Responsibility and Disclosure Act of 2009 requires the FTC to analyze and report on technology, either currently available or under development, which would allow a distressed ATM user to send an electronic alert to a law enforcement agency.  

Follow Michael Cooney on Twitter: nwwlayer8   

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