At twilight one day last fall, a California legislative aide parked near her Sacramento bank’s automated teller machine, which was at the side of the bank, in an alley between the bank and a car dealer’s lot. As she keyed in her identification code, “a guy came up the alley and stood between me and the car,” she said. “I had an uneasy feeling, but it wasn’t clear he was a robber.”
The moment she had completed the transaction, however, and withdrawn $40, the man came up behind her, pinned her to the machine, and muttered, “Keep quiet and give me the money.” After she did, he ran away down the alley, leaving her, shaken but unhurt, to report the crime to the police, “who probably thought me foolish to go to an ATM alone,” she said. In fact, she added, “I never go to that machine any more, and I won’t go to any after dark now. I’m nervous by myself even in daylight.”
Such holdups are now called ATM-related crimes (“ATM” for automated teller machine), and as ATM crimes go, this wasn’t a bad one. People have been robbed, raped, even murdered by criminals waiting at quiet sites for them to withdraw money. They have been forced at gunpoint to go to an ATM; there was even an “ATM rapist,” who kidnaped 11 different women from San Fernando Valley parking lots, raped them and then forced them to withdraw funds from ATMs before letting them go. The man accused in that case is awaiting trial in October.
The number of these crimes--from quick holdups to big news stories--is causing increased anger and concern. Victims are now suing their banks for both their injuries and their financial losses, and legislation at both state and federal levels has recently been proposed to force financial institutions to beef up security around their ATMs.
The industry, in response, says it is no big problem. What’s more, its members are doing everything they can--lights, cameras, alarms--to make ATM sites safer, while insisting that the responsibility isn’t all theirs: The consumer should watch out for himself.
Blame and even liability aside, these ATM crimes ironically represent progress: “There was horse theft, and when there were automobiles, there was auto theft,” said Cmdr. William Booth of the Los Angeles Police Department. “Now there are computer crimes, credit card crimes, ATM crimes. Criminals follow technology.”
It is no surprise that ATMs should draw a secondary--and criminal--clientele, given the rule propounded by notorious criminal Willie Sutton when asked why he robbed banks: “Because that’s where the money is.” To a criminal, ATM machines are--in the words of a recent Security Management magazine--"veritable cookie jars,” and its patrons convenient marks.
There are also a lot of them now, because they are convenient for customers and financial institutions as well. By the end of last year, there were 59,000 ATMs installed nationwide, more than double the number three years before, according to Spencer Nilson, publisher of a newsletter on the credit card industry. By last year, there were also 135 million cardholders, 43% of them “active” ATM users, Nilson said, meaning that they “use their cards one or more times a month.”
Being by definition a money machine, an ATM is a natural place for a holdup, offering robbers “easy access to fast money with a minimum risk,” said Sgt. Bob Burns, spokesman for the Sacramento Police Department. ATM users are even more likely to have gone there to get cash than customers emerging from a bank branch--two-thirds of ATM transactions are withdrawals, Nilson estimates--and can be more easily seen to have taken money out. They’re also more vulnerable standing there because “when you’re using the machine, you have to concentrate on the machine,” said Richard Martinez, an aide to California Assemblyman Charles Calderon (D-Alhambra), “and you can’t look to both sides.”
There are already some federal regulations protecting the ATM crime victim, but they protect his pocketbook, not his life and limb. Under a 1978 law on electronic fund transfers, the consumer’s liability for unauthorized withdrawals is limited to $50 if he reports the loss within two days. For a while, there was some question of what constitutes an “unauthorized withdrawal”: In one well-publicized Texas case, for example, a man forced at gunpoint to withdraw $500 was told that the loss was his because, technically, he had “authorized” it. But the Federal Reserve Board has ruled that if anyone is tricked or forced into using his card, it constitutes an unauthorized transaction, and the consumer needn’t absorb the loss.
The more difficult question, San Francisco attorney Roland Brandel says, “involves loss of property or personal injury after the transaction has occurred--where you take out money and take four steps away, putting it in your purse, and up comes the mugger. Then is there any bank liability?”
Vulnerability is another matter entirely and the focus of recent legislative efforts attempting to regulate security or, failing that, to measure it. A bill before the Pennsylvania Legislature requires that all ATMs be equipped with video cameras with wide-angle lenses, and phones that automatically ring security people. Calderon’s California bill, which didn’t pass, urged set standards for lighting, alarm systems, visibility, even privacy, “to promote ATM user safety.” He intends to try again in next year’s session, Martinez said.
And in July, U.S. Rep. Mario Biaggi (D-N.Y.), a 23-year veteran of New York’s police force, introduced a proposed automated teller machine crime prevention act calling for minimum security standards--surveillance cameras, emergency alarm systems, secure enclosures around the machines--and requiring that the FBI keep records of such crimes as they do on bank robberies. The bill is currently before the House Banking and Judiciary committees.
Now the industry is really concerned--less about the problem of security than about the suggestion that there is one. “If you have to pass standards,” said James Clark, Sacramento lobbyist for the California Bankers Assn, “the implication is that we’re not doing anything.”
Indeed, the problem is not incontrovertibly proved, if proof demands a critical number of crimes. Daily newspapers offer plenty of anecdotal matter about people robbed at ATMs, industry experts invariably speak of an increase in the crimes, but actual statistics are non-existent.
Industry groups have tried to fill the void. The California Bankers Assn., for example, rushed out some numbers from an admittedly informal, oft-quoted survey of California’s five largest banks, which claims that their 3,400 ATMs had only 181 ATM-related robberies last year, while 687 of their 2,450 branches were hit. Others are planning to “develop the numbers” in an effort “to clean up our own act,” said Richard Hudak, director of security programs and a new Task Force on ATM Crime at the Bank Administration Institute, an industry-supported research organization near Chicago.
It won’t be so easy to develop such numbers, given the fact that right now “there are events in proximity to ATMs that aren’t reported,” Clark said. Police departments generally lump attacks on ATM customers in with other street robberies: “When someone is the victim of a robbery in the vicinity of ATM machines,” a New York Police Department spokesman said, “we don’t break it down as associated with the machine.” Banks may not even hear of customers being robbed after withdrawing money--the Sacramento woman legislative aide, for example, never bothered to tell her bank.
Even if legislation requires that better statistics be kept, there is that problem of definition: When is a crime an ATM crime? “We’d have no problem calling it an ATM-related robbery if the person was robbed while at the ATM, or forced to take money out,” LAPD’s Booth says. “But what if it’s three steps away? Is it ATM-related? What about two blocks? A mile away?”
Some think that the whole squabble about statistics is irrelevant. Obviously the crimes have increased: “We didn’t have them 10 years ago because the machines weren’t out there,” Burns said. And why waste time on body counts, asks Mark Weaver, spokesman for Pennsylvania state Rep. Charles Nahill. “Do you need a study about banks being robbed to put a guard in branches?”
Disagreement over whether there is a problem is only a prelude to disagreement over the proper solution--how to make ATMs safer, and who must do it. Once again, “You have to wonder how far removed from the ATM does the bank’s responsibility go,” said Joe Belew, executive vice president of the Consumer Bankers Assn in Arlington, Va., a national trade group of retail bankers. “It gets pretty muddy when you measure the distance on the sidewalk that the bank must police.”
The industry is naturally inclined to limit its responsibility; after all, whoever has responsibility may have liability. “In most instances,” Brandel said, “there’s no liability for a business for crimes committed against a person in or near the business, but in certain circumstances, businesses have been held or could be held liable.”
Given the number of machines and incidents, “There isn’t any doubt in my mind that lawsuits will eventuate,” New York personal injury lawyer Harry Lipsig said. “A bank has a duty to provide a safe location, or to anticipate that there’ll be danger and provide for it.” What’s more, one bank lawyer said, if banks are actually “encouraging, even forcing, customers to use ATMs on certain accounts or for certain transactions, they’d have to advise you of the greater risk.”
There is even plenty of argument over how to reduce that risk (and the bank’s potential liability). Most people agree that, whatever the neighborhood, the machines should be carefully located--if possible, on the building’s front, on a street “well-trafficked and well-lit,” Belew said, “not on a blind alley.” Then, Lorna Jan Siepser, Bank of America’s vice president for ATM risk management, said, the question is, “Have we taken down shrubs, trees and walls where someone could hide?” Ideally, Clark said, “banks inspect sites once a week, checking lighting and shrubbery. And whenever an event occurs and is reported to the bank, bank people go to see whether anything at the bank contributed to the robbery.”
Some suggest drive-up machines--already available in certain places. “But the design,” Siepser said, “is problematic because the driving wheel is on the left side and most people are right-handed, so it’s awkward.”
Others urge encasing the machines--putting them “in a secure booth,” Lipsig said, “from which one can safely emerge or call for assistance,” or putting several together in a protected vestibule, as is done in the Northeast, primarily to shield against bad weather. Unfortunately, they may also offer safe harbor to criminals, as a dozen of New York’s Citibank customers found when they entered such an enclosure in March, 1981, and were forced by two gunmen inside to give up their cards and identification numbers. Nicely tucked away from street traffic, the robbers withdrew more than $3,000 from the victims’ accounts, then left with a couple of hostages, and were taken by police only after a shoot-out.
The most common suggestions are cameras and alarms, though each of those has its detractors. The Pennsylvania bill specifies installation of video cameras with wide-angle lenses, to operate when the machine operates. But such cameras only help identify participants after a crime (more help to the bank than to the victim), and might be rendered useless with a can of spray paint.
There could also be secret alarms--buttons on the ground in front of the ATM, or perhaps right on the keyboard--or built-in telephones direct to security people. But these, too, are not very useful before or during a robbery, particularly an armed robbery, and “could put the customer in even more danger,” Siepser said, “because picking up the phone or reaching out toward an alarm could panic the robber.”
In fact, no method of summoning help--built-in or nearby, secret or open--is useful in mid-holdup; “Anybody with a gun in his back’s not going to be helped by legislation,” Weaver said. And there is always the problem of someone accosted after leaving: “I’m hard-put to know what a bank could do two to three blocks away,” Booth said. It’s even possible that legislatively mandated safety features “might contribute to a false sense of security,” said American Bankers Assn. spokesman Fritz Elmendorf, “making people less cautious about using the ATMs alone or late at night.”
The current industry stance, as stated in the trade journal American Banker, “is that customer prudence is the best defense against ATM perils.”
“The lack of care of the person victimized is always considered in a lawsuit,” Lipsig said, “and could be a complete or partial bar to recovery.”
“The bottom line,” Siepser said, “is that nothing will stop somebody who’s really intent on committing a crime, except training the consumer as to when and where to transact. Banks should tell people to use common sense: Go with a friend if it’s late at night; don’t stand and count your money; if you see someone suspicious, press cancel and leave.”
Others say one should have card and deposit slip ready ahead. And New York Police Department Detective John Clifford advises, “Practice alacrity: Get the money out as quickly as possible.”
As for the banks, “It’s a difficult problem,” one bank executive said. “It’s obviously in our interest to provide the consumer a safe, well-lighted place. But we also want to provide a convenient electronic system, less costly to the bank and the consumer, and the cost of building more brick and mortar and other hardware is going to affect costs.”
The solution might well be to offer less of the service, limiting the consumer’s exposure and, thus, the bank’s. And then, asked Marcia Sullivan, a staff attorney at the Consumer Bankers Assn., “if there were fewer ATMS or fewer open at late hours, how happy would the customers be?”