News
Consultants Call for Increased ATM Security Measures
Despite low numbers of robberies at ATMs, some say it's time for financial institutions to take a hard look at ATM customer safety.
January 7, 2002
The odds of getting robbed at an ATM machine are about 3.5 million to one, according to Bank Network News, but some industry consultants believe financial institutions can do more to make those odds even longer.
"Financial institutions know everything about risk," said Ray Ellis, an ATM security consultant who recently retired as Director of ATM Security for First Union National Bank of Roanoke, Va. "After all, they measure risk in almost every area of their business -- loans, insurance, you name it."
Ellis believes it's time that banks and other FIs work together to create a logical, scientific approach to the issue of ATM crime. He said banks and FIs share a growing awareness of the importance of customer safety, but that they haven't taken steps to improve it.
The data is out there in spades Ellis said. "The financial institutions just have to pull it together and make use of it."
Getting Information
Crime data is available to members of the financial industry, including information categorized to measure risk under specific circumstances. Ellis hasn't seen evidence, however, that members of the financial community are willing to work together to use it to create industry standards.
"As far as I can see, right now it's everyone on his own," Ellis said.
Barry Schreiber, editor of ATM Security Newsletter and a Professor of Criminal Justice at St. Cloud State University in St. Cloud, Minn., said the industry appears to have abandoned the issue of security. That's probably because the number of ATM crimes is so small, he said.
He cited the Bank Network Newsstudy of 12 billion ATM transactions in the U.S. It found only one robbery occurred for every 3.5 million transactions.
Ellis agreed that interest in ATM security has waned. "Twenty years ago when ATMs were really beginning to boom, industry associations like Bank Administration Institute (BAI) and American Bankers Association really strove to put together committees and workshops, security-based education seminars, to try to reach some kind of industry approach to safety," he said.
Since then, there has been little progress, but many industry analysts believe there should be a renewed interest in the topic.
Potential cost
John W. Kennish, a security consultant based in Westbrook, Conn., said that FIs are being shortsighted on the issue. He believes many FIs prefer to ignore crime statistics because they don't want to institute costly corrective measures, though that strategy could pave the way for victims' lawsuits.
Kennish said the best defense against potential litigation by crime victims is a strong track record of policies aimed at crime prevention.
"In general," Kennish said, "the owner of a property is responsible for any foreseeable event that involves third party conduct on the property."
He said that negligence claims may be pursued by victims when:
* The defendant had a duty to meet to assure a certain level of security to protect customers who were invited onto the property to conduct their business from unreasonable risks or warn them in advance of the potential dangers.
* The defendant failed to conform to that standard of security, thereby breaching its duty to protect.
* The breach of duty, in turn, actually caused the victim's injury or can be linked closely to the event and resulting negative consequences.
* The victim suffered an actual injury of damage as a result of this condition of inadequate security.
First Union study
Ray Ellis conducted a risk assessment for First Union. He studied crime data from First Union's 3,500 ATMs to identify locations that posed the greatest risks to customers. He combined that with crime statistics provided by CAP Index Inc., a Pa-.based provider of crime data, and identified the 100 First Union ATM locations where a crime was most likely to occur.
CAP Index analyzes police reports, victim reports, self reports and corporate loss reports. It publishes an advanced evaluation model designed to accurately identify the risk of personal and property crimes for any specific address or location in the United States.
"I developed a program as a database of our history and added that in a numerical value formula to the information supplied by the CAP Index," Ellis said.
The study established the need for greater security, Ellis said, and as a result First Union installed security devices at all 100 ATM locations.
"If our data reached a certain numerical quality, then I would install a 911 button (a security device that immediately notifies authorities when a customer presses it) on the ATM at that location," he said.
Ellis said the results speak for themselves. In the five years since he's been installing the 911 buttons, there hasn't been a repeat robbery at any of the locations.
"It's more in the eyes of the beholder," he said. "It's more of a deterrent. What a criminal perceives that you have in the way of security is probably more important than what you actually have. And, so from a deterrent perspective, we found it very valuable."
Calling 911
First Union installed a 911 system provided by Biloxi, Miss.-based North American Communications Corp. Its SafeAlert 911 Emergency Communications System is installed on ATMs in 30 states.
According to Lawrence Steelman, president of SafeAlert, the 911 Emergency Communications System is a "people safeguard."
The company doesn't consider the system a traditional alarm or a panic button. At the ATM site, the 911 button and the appropriate signage are the only visible components. The button is mounted through the faceplate of the ATM. The speaker and microphone are attached under the face. The control unit is mounted on the wall of the ATM room, making it theft-proof and tamper resistant.
When a customer pushes the 911 button, an immediate connection is made with the local police dispatcher, who can hear every noise within 20 feet of the machine. Other options include a card-only activation to deter prank calls and a linked security camera. It can be configured for both walk-up and drive-up ATMs.
Crescent Credit Union, one of SafeAlert's clients, owns 16 ATMs, five of which use the SafeAlert 911 system, according to the March 1999 issue of Debit Card News. Robert Gustafson, CCU's president, reported no additional robberies at those particular ATMs since the 911 buttons were installed.
Customer Awareness
Robert Evans, director of marketing for NCR's self-service division in Dayton, Ohio, thinks consumers can learn more about ATM safety to help reduce the risk of becoming a victim.
For one thing, customers should avoid using ATMs in poorly lit locations at night alone, he told Debit Card News.
Schreiber, the criminal justice professor, agrees that increased customer education is important. He said customers who rely on safety devices, such as surveillance cameras, shouldn't necessarily feel safe.
"Even though some states, such as New Jersey, require surveillance cameras at ATMs, research data doesn't support the notion that they actually prevent crimes of violence," he said. He also recommended providers install extra lighting and landscaping to help deter ATM crime.
Schreiber also mentioned the importance of the visibility (and thus the safety) of the ATM from the nearest busy street or sidewalk, as well as timing.
"A sidewalk ATM in downtown may be perfectly safe during the daytime, but at 6 p.m. in the winter when it's dark and everybody's left downtown, it becomes a riskier location because denizens of the dark may see you as an opportune target," he said.
SafeAlert's Steelman suggested banks and financial institutions make their safety measures visible to customers by promoting them in statement stuffers, on the ATM card jacket, or with signage. Steelman said some customers increased the standard size of SafeAlert's ATM signs, giving the 911-button application more impact.
If these industry experts have their way, providers of ATMs will start working together to set standards, run more risk assessments and raise public awareness about ATM customer safety.
Sources:
Barry Schreiber, Ph.D., Professor of Criminal Justice, Department of
Criminal Justice, St. Cloud University, St. Cloud, Minn. 56301
(612) 856-4884
Barryschreiber@hotmail.com
Ray Ellis, ATM Security Consultant, Retired Director of ATM Security for
First Union National Bank, Roanoke, Va.
Hrellis@aol.com
John W. Kennish, CPP, Security Consultant
62 East Pond Meadow Road
Westbrook, Conn 06498
(860) 399-8545
john@kennish.com
www.kennish.com
Lawrence Steelman, President
SafeAlert
9994 Rodriguez Street, Suite G.
Biloxi, MI 39532
1-800-723-3286
www.safealert.com
CAP Index
www.capindex.com
Robert Evans, director of Marketing, NCR Self-service Division
www.ncr.com
