Teller Machines Getting a Workout This December

For many people, trips to crowded shopping malls, airports or restaurants this holiday season weren’t complete without a stop at an automated teller machine.

Representatives of one of the world’s largest ATM networks, Plus System Inc. of Denver, predicted that between Dec. 1 and New Year’s Day consumers will use the bank machines twice as much as in the same period last year, largely for withdrawals.

That’s good news for many financial institutions, which charge anywhere from 10 cents to $3 per transaction for such ATM services as cash withdrawals, deposits, transfers or balance inquiries.

“Consumers have clearly embraced the idea of using ATMs. They’ve become more confident in technology,” said D. Dale Browning, president of Plus System, which estimates that its ATM customers will withdraw more than $500 million during 6.5 million transactions this month.

As ATMs have grown in number and in activity since their introduction more than a decade ago, the likelihood of fraud committed by and against consumers also has increased, especially during the holidays, experts say.

“The potential for it to rise is there, just as credit card fraud rose as people started to use their cards more, and (thieves) became more aware of how they can beat the system,” said Marsha Sullivan, a spokeswoman for the Consumer Bankers Assn. in Arlington, Va.

Few estimates are available on ATM-related losses. But some experts say it runs as high as $200 million a year and has the potential to move into the billions--as it has in the credit card industry.

Bank of America narrowly escaped $14 million in potential losses earlier this year after uncovering a scam in which several insiders planned to use stolen secret codes of ATM cardholders to withdraw money from 8,000 bank accounts. The group planned to carry out the scheme with bogus bank cards made of poster board.

A recent survey by the Washington-based American Bankers Assn. found that 25% of the 1,200 banks polled reported cases of fraud committed by a customer. Thirteen percent reported fraud against a customer.

The average financial institution had 62 cases of ATM fraud last year, or about one incident for every 28,070 transactions, according to another study by Bank Administration Institute of Rolling Meadows, Ill. That was down sharply from the 390 incidents reported in 1986, due largely to increased safeguards by banks.