ATM Security under Scrutiny

Banks and industry task forces study means of Protecting customers ross the country, banks have sold many customers on using automated teller machines. In the course of providing that service-often 24 hours per day, all week long-they've had to implement a variety of procedures to safeguard both the machines and their customers. Among the banks' protective measures are closed-circuit television cameras that monitor ATM use and areas around the machines; vestibules with card-activated doors; adequate lighting; and careful site selection. Troublesome incidents. Are all of the currently used procedures sufficient? Industry sources point out that criminal activity against ATMs and customers using them has been low in comparison to other types of crimes. However, they also point out that statistics on ATM crime have not been compiled regularly by local police or federal law enforcement agencies. To obtain data about banks' experiences with ATM crime-as well as their security procedures-ABA's Security and Risk Management Division mailed 5,000 questionnaires to association members in August. It received about 1,500 completed forms and expects to issue a report based on them in November. Within the past six months, banks have been looking more closely at their security procedures. This has mainly been due to two murders that involved ATM usage. In June, a woman was forced at gunpoint to make a withdrawal at a walk-up ATM in Chicago; she was shot to death five blocks away. Another case occurred at a drive-up ATM in Los Angeles in August. The widespread local publicity that followed focused politicians' and consumers' attention on bank security practices. In Los Angeles, for example, the city council considered requiring a variety of additional security measures for ATMS. It finally settled on lighting standards. "Most large banks in the state already exceed those standards," says Barry N. Himel, vice-president in charge of security policies and programs at L.A. 's Security Pacific National Bank. In Chicago, Stephen S. Cole, president of a regional ATM network called Cash Station, says the incident in that city focused a great deal of attention on ATM security. One attorney filed a class action suit against the network on behalf of one person. "His suit implied that banks had violated the Illinois Consumer Fraud Act by not notifying consumers of the potential risk of using ATMs and had not implemented adequate securi- ty," according to Cole. Re suit was dismissed. Nevertheless, the Chicago City Council formed a task force to study ATM security in July. In addition to a city council member and Cash Station's Cole, the group's members include representatives from Chicago's banks and police force. Industry response. A second task force was developed in the same month by the Electronic Funds Transfer Association, Alexandria, Va. The members of the task force represent banks, ATM networks, and the major ATM vendors. "The recent attention given to ATMs was a motivator in pulling together the task force," explains Sean Kennedy, EFTA president and CEO. "One thing we do not want to see is the imposition of one set of standards on the industry. …