New ATM Technology Helps Eliminate Waste, Fraud and Theft

Other than a few ascetics, penitents and abstainers, almost everyone likes money. Even better than hard-earned money, is free money. To get free money, you could win the lottery, but the odds are against you. Robbing an automated teller machine (ATM) has recently become another method of choice. Becoming a bank robber is both risky and illegal. Usually, such actions result in a prison sentence for anyone so foolish as to try.

Regardless of the consequences involved, my two previous articles about ATM robbery continue to be among the most popular on this blog. As the website administrator, I can see which articles receive the most “hits”. Over time, I have watched as individuals Google “ATM Robbery” or “Bank ATM Robbery”. The number of such searches is an indicator of trans-personal economic stress. Whenever the world economy wavers, I see more search phrases that include "bank robbery". With my articles, I hope to discourage, rather than to encourage any plans to rob a bank or ATM.

In May 2008, I wrote about after-hours break-ins to bank ATM rooms. Poorly armored and alarmed ATM rooms were easy prey for break-in artists. After demolishing a demising wall from an adjoining suite, the robbers might utilize a high-speed plasma torch. With such a torch, it is easy to penetrate the lightly armored back of an ATM. With a combination of luck, skill and criminal intent, robbers could make off with more than $100,000. Better yet, the untraceable twenty-dollar bills come neatly concealed in currency cassettes complete with carrying handles.

Defeating ATM robbery attempts is relatively easy, but often neglected by even the largest banks. A combination of video surveillance, motion alarms and high-decibel alarm-horns would eliminate most such robberies. Still, many strip-center bank branches have ATM security no greater than door locks. Until the banks wake up to their vulnerabilities, I expect a continued increase in ATM break-in robberies.

In December 2011, I wrote about a new, more brazen ATM robbery. That month, in Laguna Hills, California, a local Chase Bank branch had an outdoor ATM disappear overnight. Using a large truck, robbers rammed the building, dislocating the ATM from its moorings. Using a truck-mounted winch, the robbers grappled the ATM and hauled it away. In only a few minutes, the thieves absconded with the ATM, leaving a gaping hole in the wall of the building. As of this writing, the Chase Bank Laguna Hills robbers remain at large.

There is an easy solution to the ATM-snatch-robbery phenomenon. All outdoor ATMs should have concrete filled steel bollards installed to prevent ramming by heavy equipment. A recent visit to Kokopelli Federal Credit Union (KFCU) showed no such barriers installed. Beyond exposure to “smash and grab” robbers, the lack of barriers leaves customers exposed to errant drivers. Only when enough banks settle liability lawsuits from injured customers or incur sufficient losses from outright ATM theft, will the situation change.

During a recent visit to KFCU, the ancient spirit Kokopelli was correcting their ATM problems. Seemingly everywhere at once, Kokopelli oversaw the installation of both crash barriers and new Diebold ATM security. Although busy removing an old ATM at the time, Kokopelli stopped to show me the differences between old and new ATM technology.

An old ATM, Kokopelli indicated, was a glorified envelope-processing machine, with a cash dispenser. Each day, an attendant removed the deposit envelopes, placed them in bags and couriered them to a processing facility. There, staff counted the cash and processed the checks through the Federal Reserve System. Upon receipt, a high-definition camera would photograph the contents of each envelope. That way, the bank could reconcile any discrepancies between the recorded amounts and envelope contents.

Careless or disreputable customers often deposited empty envelopes. The more brazen would later claim that they had enclosed money or checks. Although most ne’er-do-wells quickly admitted their malfeasance, some demanded proof that their envelope was empty. Either way, the process took time and money, thus creating losses for the banks. With fraud and abuse becoming rampant, banks need new ways to stop the fraudsters at their source.

Diebold New ATM Technology

In order to eliminate ATM fraud, Diebold Corporation designed KFCU’s new ATM with electronic, photographic and communications modules. By combining new hardware and software, KFCU eliminated the use of deposit envelopes and deposit slips altogether. As you feed cash deposits into the new ATM, a photographic reader rejects any defaced or counterfeit bills.

When you deposit a check, the reader sends data to both the Federal Reserve System and to independent fraud detection. Once the software accepts the account as valid, the ATM requires the customer's approval, as well. Upon agreement, the ATM provides immediate check truncation, thus debiting the check issuer’s account. Thereafter, the scanned image becomes a substitute check, eliminating further need for the original paper check. Thereafter, the paper check serves only as backup to the electronic version.

After explaining the new technology, Kokopelli exposed the backside of the new ATM. The machine contains a high-speed central processing unit (CPU) similar to a home computer. As the brains of the ATM, the CPU connects electronically to the KFCU processing center. The center connects in turn to both the Federal Reserve and fraud prevention. Included in the new machine are check and cash readers, with storage bins for each media type. Finally, there is a device that every customer loves - the Diebold cash dispenser.

With the exception of its fascia, Kokopelli installed the entire ATM from inside the building. With proper structural reinforcement and crash guards, thieves can no longer grapple a KFCU ATM and pull it through the wall. If every bank and credit union were as careful as KFCU, the incidence of ATM theft and robbery could decline. Thank you, plush Kokopelli and KFCU for continuing to cover our ancient assets.