Article

ATMmarketplace's top 10 headlines of 2011

ADA, EMV and a woman beating an ATM with a shoe were among the most popular stories of the year.

December 28, 2011

From the compliance requirements of the Americans with Disabilities Act and EMV progress in the U.S., to video footage of a woman beating an ATM with her high heel, 2011 certainly saw many interesting stories unfold in the ATM industry.

ATMmarketplace.com compiled its top 10 read articles from 2011. Take a look at what readers found most compelling:

#1: Thousands of ATMs may not be worth upgrading to meet ADA requirements

By March 15, 2012, ATMs must meet new Americans with Disabilities Act regulations. Earlier this year, ATMmarketplace ran a story that highlighted the possibility that many machines wouldn't be suitable for upgrades.

According to the story, more than 54,000 may not have been worth upgrading because the machines didn't meet financial institutions' minimum standards for profitability, primarily due to insufficient monthly transaction volume.

A bank-owned ATM must have a volume of around 1,200 transactions per month to reach the breakeven point. An independent ATM deployer-owned machine must have 100 to 200 monthly transactions to meet the breakeven point based on 2010 data, according to Leon Majors, president of the Payment Systems Practice of Phoenix Marketing International.

#2: Wiltshire police searching for woman who attacked ATM with shoe

In what seemed more like a clip from America's Funniest Home Videos, video surveillance caught a woman in the UK beating an ATM with her high heel.

Wiltshire police said the attack happened shortly after midnight on July 2 at an ATM in Chippenham. The attack damaged the keypad and the screen, leaving the machine inoperable.

"This was a completely senseless and inane act which caused sufficient damage to make the machine unusable for other customers," said Detective Constable Richard Gardner of Wiltshire Police.

#3: Former Diebold technician arrested for allegedly stealing $180,000 from ATMs

If the woman beating the ATM was a candidate for America's Funniest Home Videos, then this next guy might be a good fit for an episode of America's Dumbest Criminals.

A former Diebold Inc. service technician was arrested earlier this year in California for allegedly stealing $180,000 from seven Bank of America ATMs.

Samuel Kioskli, 62, was charged with grand theft, commercial burglary, burglary and embezzlement. According to Joe Bocci, senior detective of the Daly City Police Department, Kioskli opened the ATMs and took out the cash. He replaced the cash with either blank banknote-size paper strips or "badly printed counterfeit" banknotes. Surveillance cameras filmed him removing the money.

#4: Blind man uses ATM, transaction takes more than 10 minutes

There was more fuel for the fire when the video below showed blind film critic Tommy Edison using a non-ADA compliant ATM. The transaction took more than 10 minutes to complete.

#5: Mastercard clarifies EMV policy rumors

On Sept. 1, MasterCard announced it would extend its EMV liability shift program to include inter-regional Maestro ATM transactions. The move is part of an effort to align technology efforts to prevent and manage fraud, according to the company.

The liability shift will cover both the United States and Asia-Pacific regions and will be effective on April 19, 2013.

"MasterCard is trying to take a market-leading position. The EMV freight train is picking up steam," said Aite Group Analyst Julie Conroy McNelley.

#6: Nautilus Hyosung agrees to pay $200,000 criminal fine for obstruction of justice

In August, Nautilus Hyosung Holdings Inc. agreed to plead guilty and pay a $200,000 criminal fine for obstruction of justice in connection with a premerger filing and investigation by the Antitrust Division of the U.S. Department of Justice.

According to court documents, an executive of a company affiliated with, and acting on behalf of, Nautilus Hyosung altered and directed other corporate employees to alter existing corporate documents with the intent to impair their integrity and availability for use in an official proceeding.

The department also said that, among other things, the alterations misrepresented and minimized the competitive impact of the proposed acquisition on the market for ATMs in the United States.

#7: Five ways to innovate at the ATM

In a survey of ATM industry professionals, conducted by ATM software vendor Level Four, "channel integration" and "offering new services" topped the list of priorities for ATM deployers in the next 12 months.

Based on the survey responses, Level Four CEO Ian Kerr suggested these five strategies to innovate at the ATM:

• Integrate the ATM with mobile
• Tailor the ATM offering to meet the needs of the individual customer
• Increase the range of services offered
• Increase security
• Improve accessibility

The story noted that ATMs are still one of the most used touch points between a bank and its customers. The number of banknotes in Eurozone is growing by about 9 percent per year and cash, largely obtained from ATMs, still accounts for around 78 percent of retail payments in Europe.

According Aite Group, even if cash usage were to decline by 17 percent every five years, the use of cash still wouldn't fall below $1 billion before the year 2205.

#8: Lawsuits filed against bank-owned ATMs that do not display surcharge-fee sticker

In April, ATMmarketplace reported that a retired couple was driving through Michigan and filing federal lawsuits against bank ATMsthat didn't post surcharge notices on the machines. They sued 36 banks.

The couple, Nancy Kinder and Ray Harrison, filed the lawsuits in Michigan federal courts, alleging that banks were violating the Electronic Fund Transfer Act, which Congress passed in 1978 to establish consumer rights and liabilities. The legislation requires banks to display surcharge fees on ATM screens and on the machines' cabinets.

The article noted that filing federal lawsuits against banks when their ATMs do not display surcharge-fee stickers has given birth to a nationwide cottage industry. Consumers have filed lawsuits in California, Texas, Illinois and Michigan.

#9: FBI: ATM skimming, third party payment processor breaches expected to grow

An excerpt of the testimony of Gordon M. Snow, assistant director of the Cyber Division, Federal Bureau of Investigation, was published on ATMmarketplace in September. His statement was delivered in Washington, D.C., before the House Financial Services Committee.

In the testimony, Snow specifically addressed ATM skimming:

Even as technology improves to protect against skimming, cyber criminals are creating devices to mimic the security features of legitimate ATM hardware. For example, ATM vendors have created new anti-skimming tools that include a backlit green or blue plastic casing around the card slot to prevent skimmers from being attached. In Ireland in early 2011, cyber criminals attached several skimmers that appeared identical to the new security devices.

As the subcommittee is aware, the number and sophistication of malicious incidents has increased dramatically over the past five years and is expected to continue to grow.

#10: Concerns voiced over looming ADA compliance deadline

Another story on the ADA requirements caught readers' attention because it highlighted the concerns independent ATM deployers had regarding upgrades, misinformation and costs.

One problem, according to Jason Kuhn of Payment Alliance International, is that manufacturers began to modify ATMs to comply with the 2004 guidelines. But some guidelines were further modified, he said, leaving the machines' ultimate compliance in doubt.

The article also stated that many independent ATM deployers and banks believed they'd be granted safe harbor across a wide range of issues and could avoid making widespread alterations by claiming financial hardship.

The new law will cut some slack in narrow instances — for example, a machine that was installed by 2010 and met the original 1991 ADA guidelines pertaining to height and reach is grandfathered, as long as the machine stays where it is.

Relocate it, however, and the exemption is gone. And voice guidance is non-negotiable.

ADA compliance expert Sam M. Ditzion, CEO of Tremont Capital Group Inc., said a large number of people in very prominent positions in the ATM industry have been communicating inaccurate interpretations of the technical regulations to large numbers of IADs.

"It's very, very dangerous and will likely lead to significant liability to many stakeholders in the industry," Ditzion said.

What stories do you think should have made it to the top 10? Tell us in the comments section below.