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False claims of undispensed cash costing ATM owners millions

US ATM operators are forking over $20–$25M annually in fraudulent claims — and the perpetrators are getting away scot-free, the ATMIA says.

September 24, 2015

The ATM Industry Association has announced that it is launching an investigation into fraudulent ATM withdrawal disputes.

In an announcement, the organization said that abuse of Reg E processes for ATM withdrawal disputes has grown significantly, constituting a serious problem for the industry as a whole, and for IADs in particular.

Research commissioned by ATMIA and authored by Tremont Capital Group has concluded that approximately 20–25 percent of these disputes are fraudulent, and cost the industry some $20 million annually.

Fraudsters carrying out the scam typically make withdrawals of $100 to $200 from numerous ATMs and then file a dispute for each, claiming that no cash was received.

Current regulations and network policies give consumers 180 days to file disputes, but require operators to respond within seven days. Because the cost of responding to a dispute can equal or exceed the withdrawal amount, some claims go unchallenged, the announcement said.

Further, because issuers might not have knowledge of fraudulent activity occurring at ATMs other than their own, the perpetrators of extensive fraud operations can go unpunished.

ATMIA said it will be discussing the problem with ATM networks and will provide updates on its progress toward resolving the problem.

A report addressing the issue of fraudulent withdrawals is available for download by ATMIA members for their exclusive use.

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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.

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