STRATEGIC PARTNERS
People may use your ATMs more if they feel safe. A revolutionary new ATM insurance product offers protection. by Kevin Gibson, contributing writer
March 7, 2002
Jenny Haverlah paid little notice to her surroundings. She had just withdrawn $20 at a drive-up ATM and her son Mathew made a mess of his McDonald's Happy Meal in the passenger seat, drawing the brunt of her attention. Occasionally she eyed the darkness outside.
A man approached the front of her car and asked if the machine worked. Startled at his abrupt appearance, she said it worked fine. "Then he pulled a gun on me and said, 'I want your money,'" she said.
This story and others like it have prompted a litany of security measures increasing ATM safety for customers. From machines with built-in "panic buttons" to law enforcement agencies installing ATMs on site, few stones have gone unturned.
But Patrick Merkley may have turned over the best stone so far. His Napa, Calif.-based company, Telmach Risk Management Inc., has developed ATMsafe, which would insure ATM users from the time they approach the machine until several minutes after they have completed their transaction and gone on their way.
Merkley gave birth to the ATMsafe concept after learning that about half of all ATM users are concerned about being robbed. He constantly heard news reports about proposals to close ATMs after dark in some cities, and he read about legislation that forces banks and ATM owners to make their machines safer.
"The banks and ATM operators hesitate to do anything about (ATM safety education) because they hesitate to be negative about it," Merkley said. "But the consumers already know about it."
The son of a police officer, Merkley heard for years about the precautions people should take when using ATM machines. He wants to insure the customers financially and educate them about ATM safety up front rather than reacting later.
"Along with ATMsafe, we want to educate the consumer in a proactive way, and if there is an incident, we step in and try to help the customer get through that process as quickly as they can," he said.
The program not only would insure the customer for money lost due to robbery, but also for hospitalization if the customer is injured, and for $50,000 in case of death. This helps the customer feel more secure, relieves the bank or ATM owner of potential liability, and provides another marketing tool for institutions that sign on to the program, Merkley said.
Data gathered in 1997 for Merkley's marketing plan indicates that 50 percent of ATM users are concerned about safety and security at the machines, and about one-third of non-users listed safety as a reason to not use ATMs. Nine of 10 people surveyed felt it was the financial institution's responsibility to provide a safe and secure environment at the ATM.
Haverlah, who lives in Harrison, Tenn., said the machine where she was robbed was anything but safe. She lived in Corpus Christi, Texas, when the robbery attempt was made against her. She said the robber reached in the car window and grabbed her $20 bill, and she took a chance and sped away, ripping the bill in two. "I don't know if he got enough of it to spend," she said.
Even though the man eventually was arrested and jailed--her neighbor happened to be driving down an off-ramp by the ATM, saw what was going on, and called police--Haverlah said the robbery made it almost impossible for her to go out after dark again for nearly two years.
"I was petrified of any young male. If it was anywhere near dusk, I wasn't going anywhere," she said.
The robbery occurred in a Kmart parking lot near the road, and Haverlah said the man probably had waited for someone to come along and use the machine "for no telling how long."
She still uses ATMs because of their convenience, but she will use them only during the day and will use only those that are enclosed or in a populated area. In her case, the ATMsafe approach would have helped her not only to get her money back, but to avoid a situation in which she was so vulnerable.
Merkley said the standard rules for ATM safety always should be followed: don't count your money while you're standing at the machine, lock your car doors, have your card ready and your PIN memorized. There are many, but he stressed that it's important to "go to ATMs that you perceive are safe." Naturally, those would be ATMs with good lighting, sites without shrubbery where a would-be robber could hide, and those where there always are a lot of people nearby.
Cameras that record transactions are in place at many ATMs but unfortunately cameras don't always keep the customer safe. A February 23 Dateline NBC told the story of David Breen, who was robbed by two men and shot at an ATM in Brooklyn. When he staggered, bleeding, into a nearby police station he was asked for a description of the robbers. "And I remember very vividly saying, 'You can get it from the tape,'" Breen told Dateline.
But he was wrong. There was no film in the camera. The show also detailed a story in which a robbery was caught on film, but the tape was so worn that police couldn't get a clear image of the robbers. Several other incidents reported on the show turned much out the same way.
Betsy French, who is in charge of ATM control at Bank of Louisville in Kentucky, said customer safety is the prime concern when installing any new ATM. She and her staff work with the bank's security department and the ATM vendor, because of their vast knowledge of the business, to create the safest ATM site possible. Lighting, visibility and landscaping are just a few of the aspects taken into consideration.
French said she can't recall a specific incident when one of her customers was robbed. Still, safety is a priority.
"I know that it is a concern in the community," she said of ATM crime. "Crime is more prevalent today in Louisville than it was a few years ago, and I think all our institutions are becoming more security conscious."
As for Merkley's ATMsafe proposal, French calls it "a very interesting concept," but said she would have to put a lot of thought into it before giving it her endorsement.
"I don't know how easy it would be to administer because not every location has a camera, so it would be difficult to gauge the exact time frames for an incident," she said. "I don't know how comfortable that would make a customer feel, to be honest. That could go either way, because a customer could say, 'If you feel the need to give me this insurance, maybe I don't want to use an ATM after all.'"
All the more reason Merkley believes the educational part of ATMsafe is so important.
"I think the public education needs to focus on being alert and on being aware of your surroundings," Merkley said.
The research conducted for Merkley's marketing plan also revealed that 63 percent of ATM cardholders expressed positive interest in the insurance, with 26 percent saying the coverage is "very much" worth having.
"I think it's a service that is needed," Merkley said.
>Sources
• Betsy French, ATM administrator for Bank of Louisville, can be reached at (502) 562-5868.
• Mr. Pat Merkley, president of Telmach Risk Management Inc., can be reached by phone at (707) 224-3109, and fax (707) 255-7597.
