Glitch in Mellon Bank Computer : ATMs Play Pac-Man, Eat 2,000 Cards

Mellon Bank on Wednesday began returning some of the 2,000 plastic banking cards that its automatic teller machines gobbled up during a 1 1/2-hour binge.

From 8:30 to 10 Tuesday morning, a glitch gave the bank’s computer amnesia--it didn’t recognize the cards and ordered the teller machines to confiscate them as possible fakes as fast as customers could insert them.

And nary a dollar was spit out in return.

A computer memory disk containing information about each customer’s file was destroyed and a backup system failed to operate, said George DiNardo, executive vice president for information management.

“The computer thought it was reading a blank magnetic strip on the back of the card,” he said. “It said: ‘Uh oh, if there’s nothing there, this is a potential counterfeit.’ ”

Most of the problems occurred at machines in the Pittsburgh area, but DiNardo said Mellon Bank customers using CashStream or Cirrus machines in 44 states or Canada during the 1 1/2-hour period also would have forfeited their cards. “There are no customers attacking me, but I can’t tell you they aren’t running to branches and yelling,” he said.

Despite the problems, DiNardo said the computer did its job by erring on the side of caution. He said Mellon programs its computers to have the teller machines collect the cards rather than return them to customers if there is anything unusual.

“We, in our rather conservative approach, choose to risk customer complaint but err on the safe side and collect the cards,” he said. “We still are convinced that our conservative approach is the right way.”

DiNardo said the bank’s computer will be reprogrammed to sound an alarm if such an occurrence is repeated at least 20 consecutive times.

He said bank officials are still convinced that the system is sound.

“We’re absolutely satisfied,” he said. “If NASA can have problems on the space shuttle, so can we.”