STRATEGIC PARTNERS
Liability suits can take a big bite out of an ATM owner's bottom line. Are emergency alert systems the answer? by Ann All, editor
March 11, 2002
ATM crime is a lot like a growling dog. It affects few people, yet many fear it, no one wants to encounter it, and it sometimes results in violence.
It's hard to get a handle on how many ATM crimes are committed, as they're not generally tracked separately. Westbrook, Conn. security consultant John W. Kennish said financial institutions don't want consumers to know how many crimes are committed at the ATM.
"Any corrective measure regarding ATM security costs money," he said. "So every time the idea of breaking out ATM crime comes up, the bankers go into cardiac arrest and lobby against it."
A BAI Global study estimates one ATM crime is committed for every 2 million transactions, or about 5,500 crimes a year. The American Bankers Association puts the number at an even lower one crime for every 3.5 million transactions, or about 3,000 a year.
Yet consumers don't seem reassured by the statistics. A survey by the National Research Group found that 28 percent of ATM users in metropolitan areas had avoided using an ATM because of safety concerns. Nearly all of those questioned thought ATM owners were responsible for their safety.
Kennish said consumers are savvy about crime, and the duties and responsibilities of property owners to prevent it. "The public in today's world demands safety and security. Customers are sure as hell not beyond challenging a bank if they see something dangerous."
ATM users an easy mark
The media has increased public awareness of all crime, including those committed at the ATM. Kennish thinks that's generally a good thing, but warns that prospective criminals are among those reached by the media.
"When crime is publicized for the customer, it's also publicized for the criminal," he said. "Criminals are looking for an easier way to make their money. What's easier than someone using an ATM late at night when the bank is closed and nobody's around?"
Kennish believes the proliferation of off-premise ATMs has made life a little easier for criminals. "Twenty years ago, you had very few ATMs and they were all housed at bank branches, but then we went a little further out into the parking lot and now they're all over the place," he said. "With that increased marketing opportunity has come increased security exposure."
Another industry trend that Kennish feels may be contributing to the problem is the wave of bank mergers. He is currently an "expert witness" in a lawsuit involving a crime that took place at a bank branch in 1996, four years after the bank was acquired in a merger.
"For four years, nobody got out to that branch and corrected the security shortfalls," he said. "When a bank goes from 300 to 1,200 branches overnight, the first thing they do to recoup their money is prune back personnel. One of the first places they cut back is security, because security is a cost center and not a profit center."
Banks also tend to focus on preventing daytime robberies, fraud and other "traditional" offenses, which could make the ATM customer a more attractive prospect to criminals.
An owner's responsibility
When considering security measures, an ATM owner must consider the inherent risk of a location and whether it's foreseeable that a crime could occur. Kennish said almost any ATM location carries some inherent risk "because the commodity is currency."
Some locations, however, are obviously more dangerous than others. Kennish pointed out that the owner of an ATM in a small town with very little crime has a different degree of responsibility in protecting his customers than an owner in a traditionally high-crime area.
Kennish encourages ATM owners to perform a crime risk survey at each location. Local police departments generally provide the service at no cost. Kennish has performed surveys and helped design security programs for banks such as Crestar and Union Planters.
Kennish said ATM owners can't be forced to provide security. "It's like car insurance. You can recognize the liability, accept the risk and carry it yourself. If nothing happens, you win. If something happens, you lose."
SafetyPIN
Glendale Heights, Ill. attorney Joseph Zingher said he's encountered an "if it ain't broke, don't fix it" attitude while trying to market his SafetyPIN emergency notification system. With Zingher's system, an ATM user could enter a special PIN if he was threatened. A typical SafetyPIN would be as simple as a user's regular PIN in reverse order.
Zingher said a bank's computer or processor's computer, or both, could check entered PINs against a database. If a SafetyPIN was entered, a computer would determine the ATM location and send a distress message to the nearest police department.
Zingher said his system requires no investment in new technology and is so simple, "it could be put in place around the nation within weeks." At least one industry observer has questioned whether all ATM locations could be pinpointed, but Zingher wonders why that would be a problem. "They have to know where an ATM is to go and put money in it," he said.
Zingher hasn't signed any deals yet, but he envisions a small bank as the first user of his system. He suggests using monthly statements to make customers aware of the SafetyPIN system, and then posting reminders of how to use it at each ATM.
He acknowledges that false alarms could happen but doesn't think they would be a major problem. "The bank can easily identify a user from their card, and it's against the law to falsely report a crime," he said.
Zingher believes ATM robberies are potentially more violent than other types of street theft. "Your average street crime is over in just a few seconds, so you're not going to be a good witness," he said. "With a forced ATM withdrawal, you're standing there with the bad guy for a comparatively long time. He has a motive to make sure there are no witnesses."
Because he obtained a patent and has been advertising his system in legal journals, Zingher said ATM owners have more reason to be concerned about liability. "The mere fact it's out there means they have been put on notice. The SafetyPIN concept gives a plaintiff's lawyer ammunition."
SafeAlert
Like Zingher, North American Communications Corp. of Biloxi, Miss. wanted to give ATM users a way to summon help if they were in distress. Their SafeAlert system puts ATM users in direct, two-way contact with a local 911 system when a button on the face of the ATM is pushed.
"In a life-saving situation, you want to make a direct telephone call as quickly as you can," said Larry Steelman, the company's sales manager. "Even if you got shot or stabbed and couldn't talk, you can get help if you can push the button."
Most SafeAlert systems are connected to enhanced 911 systems, which means that an ATM location will appear on a dispatcher's computer screen. A speaker installed under the machine's face allows a 911 dispatcher to monitor sounds within about 15 feet of the ATM.
The company also can add audio capability to an existing video camera. "That way you know what the 911 operator said to the victim, and you can put it all together later," Steelman said, noting that 911 audiotape is admissible evidence in a criminal trial.
SafeAlert was invented by former police officer David Hines after an Air Force sergeant was robbed and killed while withdrawing money from a Biloxi credit union ATM in July of 1992. The first system was installed a month later at Keesler Federal Credit Union, the site of that crime.
The company has installed the system at banks in 30 states and the District of Columbia. It uses technology similar to a programmable speaker phone, and can be installed on any make or model ATM. Rather than installing an additional phone line, most banks opt to use an existing fax line. In an emergency, the system seizes the line and calls 911.
Steelman said false alarms haven't been much of a problem. The system is activated by a user's ATM card. After a card is removed, the system remains active for a predetermined time, up to five minutes. A plaque informs users that the 911 button is for emergency calls and warns them of the penalties for making a false crime report.
For more information:
SafeAlert
SafetyPIN
John W. Kennish
The ATM 911 logo is a registered trademark of North American Communications Corp.
