This article appeared in the ATM & Financial Self-Service Executive Summary, Winter 2006.
Ram raids, ATM break-ins and attacks at the ATM are nothing new, but they've recently gotten a lot attention. From Australia to the United Kingdom to the United States, ATM deployers, especially independents, are working to address not just the loss of vault cash, but the loss of ATMs.
Barry Schreiber, a criminal justice professor at St. Cloud State University in Minnesota, has studied ATM crime for more than 20 years. Based on his research, an estimated 200 ATMs are stolen annually in the U.S.
Mark Coons, president of Charlotte, N.C.-based American Special Risk LLC, a company providing an ATM insurance program through the ATM Industry Association, told ATMmarketplace in 2004 his company pays about $4.5 million a year for claims related to smash-and-grab attacks. Eighty percent of those claims, an estimated 300 a year, involve the removal of an entire ATM.
Smash-and-grab on the rise?
"The biggest problem I see is smash-and-grab," said Jerry Gregory, corporate development officer of Dallas-based Cash Carriers USA. "It's the most prevalent thing in our industry."
Not surprisingly, retail locations, primarily convenient stores, are the most vulnerable, Gregory added, because most retail ATMs weigh less than 200 pounds. "We have one store that has had its ATM rammed seven times. Last week, we had the same thing happen at two machines owned by the same customer. There's a lot of it going on."
Companies are now developing products that deter thieves by preventing easy ATM break-ins or removals.
Cash Carriers, which developed its Phase II Cash System for Diebold's 1074 Island ATM, recently released its newest product, Phase II Cash Sphere.
Gregory said his company's Phase II Cash System delays entry into Diebold's 1074, 1074i and 1074ix by several minutes to hours. The new product, which sells for less than $500, is designed to keep ATMs of any make or model bolted to the floor. It's a simple sphere design that attaches to the bottom of an ATM and is then anchored to the floor.
Other companies also are marketing alarm products to deter would-be thieves. Seven months ago, Dax Bosnich, owner of Cincinnati-based Bull Horn ATM Alarm, released an alarm system with a microprocessor that adheres to the bottom of an ATM's safe. If the ATM is pulled from its foundation, tilted or moved, the alarm - which produces a sound with the decibel level of a jet engine - goes off.
"We're selling 60 to 70 units per month, and it's been growing every month," Bosnich said of the alarm, which sells for less than $400. His company also is developing a new alarm that uses a microwave sensor to detect when the door of an ATM enclosure is opened. That product is expected to release early this year.
Pick your protection
Alarms are big business. Bosnich, who also owns Hassle Free ATMs, a Cincinnati-based ISO, developed the Bull Horn ATM Alarm after a couple of his own ATMs were hit. He said he sees potential to serve both retail ATMs and financial institutions, which have a vested interest in protecting cash, cash carriers and consumers.
California-based La Gard, a division of Computerized Security Systems and distributor of electronic safe locks, is expected to release its Navigator lock system with alarm during the first quarter of 2006. The alarm works in duress mode and is designed to protect cash carriers and service providers, said Orlando Consalvi, the company's national product manager.
If a carrier or service provider is approached while at the ATM, he enters his seven-digit access code plus an additional number. A silent alarm is routed to the alarm company, which then notifies the police. "Navigator also has a monitoring module, which provides a real-time look at what's going on at the ATM," he said. "As soon as a carrier goes to an ATM and requests to open it on the central server, if he's not supposed to be there, it sends a red flag."
However, Consalvi said there hasn't been a great deal of interest in the duress option since many ATMs, especially those manufactured by Diebold and NCR, come equipped with similar functions.
But protecting cash carriers and service providers is only part of the problem. Other companies are marketing products that are geared toward consumers.
Like the figures for ram raids, Ron Russikof, president of Philadelphia-based ATMOnGuard, said the number of forced withdrawals throughout the world hasn't decreased from year to year. And the problem is a growing one. According to ATMOnGuard's research, 82 percent of ATM cardholder crimes in the U.S. are forced withdrawals.
But attempts to remedy consumer threats, such as panic buttons and reverse PINs, haven't had widespread adoption for a number of reasons, Russikof said. Consumers were intimidated to use panic buttons, since their use wasn't easily concealed from assailants. And the reverse PIN, developed by Joe Zingher, has been difficult to sell since a consumer in duress isn't likely to remember his PIN in reverse order.
Chip Minto of Safealert Systems, a division of Pace, Fla.-based North American Communications Corp., disagrees with Russikof, adding that panic buttons and similar products serve different purposes. His company's ATM911 emergency communications system, a 911 panic button, is installed at more than 2,000 U.S. ATMs.
Minto adds it is the only system of its kind currently in use. "We've been putting these systems on ATMs in high-crime areas since '98 and'99. Our market now is primarily smaller banks and credit unions."
The ATM911 system is individually installed at each ATM and is meant to provide ATM users a means of contacting 911 dispatchers after robberies or attacks.
"If someone is sitting there robbing you at the ATM, we don't encourage you to risk your life (by pressing the button)," Minto said. "The 911 button is designed to do two things: No. 1, it acts as a (crime) deterrent, and No. 2, it helps speed up the police-response time."
The product is not designed to alert authorities while a crime is being committed.
Russikof, who has been tracking forced ATM withdrawals since 1999, is expected to release a new product next month that is specifically designed to thwart crimes in the making.
The solution is simple, and it's similar to what La Gard includes on its Navigator lock for cash carriers and service techs. When a user enters his PIN, instead of hitting four digits he always hits five. After entering the PIN, the user hits either "1" for transaction acceptance or "9" for duress, for instance.
Russikof points out that the deployment of the solution is expected to be seamless, since the software is installed at the host and deployed networkwide.
"To me, it's simpler," he said. "It's just one more button they have to punch. It's a lot easier to remember because you're using it every time - you're always pressing an additional key."