Magazine article American Banker

Banks under the Gun as ATM Safety Laws Increase

Magazine article American Banker

Banks under the Gun as ATM Safety Laws Increase

Article excerpt

With a number of cities and states well along in their implementation of new automated teller machine security regulations, the veracity Lao-tzu's words is about to be put to a rigorous modern-day test.

California and New York City lead the way in establishing laws to thwart robberies of ATM customers.

Other areas of the country - Florida, New Jersey, and Philadelphia, for example - are now following with legislative efforts of their own.

Observers expect new regulations in these regions by the end of the first quarter. But even before these efforts had begun, the issue of legislating minimum ATM security standards had already gained national prominence, thanks in large part to a still-raging battle over the implementation of New York's law.

Industry Reacts with Fear

Widely recognized as the most severe ATM security legislation in the nation, the New York law sent ripples of fear through the banking industry and spawned the recent spate of similar laws.

Yet despite an increasing willingness by lawmakers to dictate the best way to ensure ATM customers' safety, the incidence of ATM robberies appears to be rising.

Note, that was "appears" to be rising, not "is" rising. No national agency specifically tracks ATM crimes, so no one knows for sure what the trends are in this area.

However, with the controversies surrounding legislative bodies' rights to mandate security measures such as full-motion video cameras, individual ATM incidents are getting a lot more play in the media.

Robberies that once would have been classified as petty crimes are now newsworthy events that invite coverage, not only by local newspapers, but also by major television networks and even the national news wires.

A recent report by United Press International, for example, chronicled three cases of criminal abduction in New York in which the victims were sexually abused and forced to turn over their ATM cards.

After detailing the incidents and listing the criminal histories of the suspects, the article pointed out that the surveillance camera at the site of the attempted ATM robbery was broken.

Demand for Surveillance

Queens District Attorney Richard Brown termed the bank's failure to repair the camera "unconscionable," and suggested that New York banks bear responsibility for curtailing the roughly 375 ATM crimes that occur in that city each year.

"The rash of ATM robberies that have been occurring lately in the city will only be stopped if the banking industry recognizes its obligation to install functioning surveillance cameras at every ATM facility," he said.

Experts said the increased appearance of reports like these creates an impression that ATM robberies are becoming a more popular pastime for career muggers.

"The national statistics suggest that the incidence of ATM-related crimes is very low, but if you read the papers, you'd think exactly the opposite is true," said John Byrne, senior counsel at the American Bankers Association in Washington.

There is evidence to support claims that media coverage of the ATM crimes features an element of sensationalism.

24-Hour Stores Harder Hit

Mr. Byrne points to Federal Bureau of Investigation figures that show about 10,000 bank robberies in 1991. Even if 50% of those were ATM-related incidents, the number of ATM crimes still would be far below the average number of crimes at other 24-hour businesses.

For example, FBI figures show there were about 36,000 convenience-store robberies last year, Mr. Byrne said.

While bankers say there is no acceptable level of ATM crime, they believe robberies of ATM customers are still relatively uncommon events. …

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