News

ATM fraud misunderstood by the masses

After an enlightening experience with the Fourth Estate, ATMIA President Tom Harper says members of the ATM industry have a responsibility to educate the public about ATM fraud.  

October 6, 2003

There are times when what you don't say opens a door of opportunity.

Imagine my surprise when I learned that I had been quoted in the Aug. 3 New York Times.  My quote didn't necessarily reflect positively on the ATM industry, so I wasn't too thrilled to see my words repeated this way in one of the world's largest and most respected newspapers.

What the paper said I said was that ATMs are the weak link in banking.

Now I don't remember saying it, and I certainly can't defend it, but I'd sure like to have had a chance to speak to the reporter in question.

In fact, I must have made the comment months ago at the ATM Industry Association (ATMIA) conference in Miami, where a New York Times television crew taped an interview. Reporter Walt Bogdanich, whom I've never spoken with, must have taken my words from that tape and used them as part of a story on ATM crime. He didn't call to verify my comments or put them in proper context.

Though this type of journalism skirts the edge of ethical reporting, I figured that would be the end of it, so I moved on. However, a week later a CBS News producer called, expressing interest in conducting an on-camera interview for a news segment in which my statement was a focal point.

Say no evil

I frantically prepared for the interview, which I understood would be broadcast to millions of people and an international audience. It seemed a chance to straighten out the botched New York Times quote, to set the story straight and portray the ATM industry in a favorable light.

But that wasn't the story CBS wanted, and when I told the producer I wasn't interested in elaborating on the misleading quote, he told me to have a nice day.

It was certainly a learning experience, in many ways. For one, the time I spent researching the ATM crime issues revealed two truths we, as representatives of the industry, should be pushing in the media every chance we get. But before I reveal those truisms, here's another point to make with reporters.

The growth of ATM crime is relative.

No one is denying the proliferation of ATM crime and fraud, but it still makes up a tiny fraction of criminal activity experiencing growth. Consider the growth of terrorism, computer viruses, check and credit card fraud, computer spying and e-mail scams. Unfortunately, the ATM seems to be an easy target when media members go looking for crime stories.

The fact is that the public wants its ATMs. A recent Harris Interactive poll found that the ATM was as vital to respondents as e-mail, equal in consumers' minds to cell phones, and trailing only computers and microwaves in popularity.

Dove Consulting predicts nearly 14 billion ATM transactions will take place in the U.S. this year, but some industry experts believe that just .0016 percent of those will be affected by crime or fraud. More than $1 trillion in cash will be withdrawn from ATMs. Of that figure, industry estimates are that just $50 million may be lost to fraud or crime.

Now here's the truth(s) I had planned to tell CBS about the ATM industry:

Truth #1: The ATM industry is aggressively addressing fraud

Few in the industry are aware of the extraordinary efforts being made to fight ATM crime and fraud. Consider the following list of initiatives, which you may use if and when you are asked by a reporter about the topic:

• ATM Integrity Task Force - The Electronic Funds Transfer Association (EFTA), in affiliation with ATMIA, is publishing recommendations on PIN security; working with the Secret Service and ATM product and service providers.
• Global ATM Security Alliance (GASA) - An arm of ATMIA that is organizing international efforts to combat cross-border crime rings. It is working with the Secret Service, Interpol, the Metropolitan Police Flying Squad for New Scotland Yard and major card issuers.
• ATM Security Conferences - ATMIA is educating the ATM industry on the most effective ways to fight ATM crime and presenting awards to those who contribute significantly to the cause.
• ATM Security Working Group - An organization based in the UK that, among other projects, publishes recommendations for boosting security at freestanding ATMs. (See related storyUK's ATM Security Working Group could serve as model for U.S.)
• Fair Isaac Card Alert - A service that analyzes millions of daily transactions and identifies suspicious activity in near-real time, then sends a list of potentially compromised card numbers to affected financial institutions. This service has been instrumental in solving many fraud cases, including the high-profile skimming case in New York City. Other companies have similar products.
• Modification to machines by major ATM manufacturers to detect tampering and, in some cases, shut the machine down if fraudulent activity is detected. (See related story Fraud fight gets more proactive at ATMs)

Truth #2: Consumers can help fight fraud

The following tips can help consumers avoid becoming victims, and there's an industry-wide fringe benefit we can't ignore: overall ATM crime could decrease if customers follow this advice. I hope that banks, ISOs, retailers and other organizations dealing with the public will communicate tips like these to their customers.

• Use ATMs you're familiar with so any changes will be more apparent; for example, a false attachment on the front of the machine will jut out a couple inches, or a screen message you've never seen may tip you off that a fraudster has altered the machine
• Cancel your transaction if you feel uncomfortable in any way
• ATMs with security cameras (including machines located inside businesses and in business-hours branches) are less likely to attract criminals; seek out these machines when possible
• Be suspicious if your card is "eaten" by the machine and someone approaches you to say the same thing happened to them, then advises you to enter your PIN again
• Limit your after-hours ATM use
• Watch for "shoulder surfers" who watch you enter your PIN
• Keep a watchful eye on your monthly statement, as well as your balance, and report any problems to your bank

The good news, according to Kurt Helwig, executive director of EFTA, is that in the fraud cases on record, the affected banks covered all losses. But it's still a good idea to notify your bank of any suspicious activity on your account.

Ready for a reporter?

Speaking to reporters, I've learned, is something to be taken seriously. If you have an opportunity to talk to a reporter about your business or a general topic like ATM crime, prepare by compiling a "talking points" document. Review it, memorize it and deliver it with enthusiasm.

Perhaps the ATMIA should produce a document that includes tips from the more experienced media relations people in our industry. This could be a valuable resource for our members, available online, that could serve as a to-do list for those doing media interviews. 

Issues like ATM crime are important. Consider how a negative report on the safety of ATMs could impact transaction levels. We know the risks of being a crime victim at ATMs are tiny, but reporters don't have the same knowledge that we do. Whether you've earned the distinction or not, to a reporter, the fact that you're in the ATM business makes you an expert. And reporters expect experts to know what they're talking about.

By sharing information through ATMIA, we can be better prepared for media interviews, and more importantly, deliver the same message whether the reporter is from the New York Times or a local weekly.

It's not often a product or service embeds into the fabric of global culture. If the public's confidence in the ATM remains solid, our industry will continue to enjoy widespread growth and acceptance.

Tom Harper is the founding publisher of ATMmarketplace.com, co-founder of the ATM Industry Association, and the association's current president. He is the founder of the Future Trends Executive Round Table on ATMmarketplace. He left a career in radio advertising sales to join WaterMark Group in 1996, leading the ATM supply division of the firm, before shifting his focus to the online world. In 2000 Tom co-founded NetWorld Alliance and serves as the company's president.

Included In This Story

---

ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

Request Info

Learn More