ATMIA takes aim at $20M in ATM withdrawal fraud

From ATMmarketplace.com

Research commissioned by the ATM Industry Association and authored by Tremont Capital Group has confirmed that approximately 20–25 percent of ATM withdrawal disputes are fraudulent.

In response to these findings, ATMIA will launch an investigation into the issue and work with networks, issuers and processors to find ways to reduce the problem, an ATMIA press release said.

Currently, network rules and payment regulations stipulate how much time a customer has to file a claim as well as the length of time allowed for a response to the dispute. This is typically somewhere around 180 days for the consumer and six days for the ATM operator.

However, most fraudulent claims reported at independent ATMs come more than 90 days after the event and many retail cash machines have a 90 day journal, making it impossible to dispute a claim older than 90 days without an investigation that would take longer than six days.

So, while a pattern of claims on a card used at a bank-owned ATM will often result in an account closure or card reissuance, similar activity at independent ATMs typically goes ignored, the release said.

"[Withdrawal disputes have] become a $20 million annual problem for the industry," ATMIA U.S. Executive Director David Tente said in the release. "ATMIA is reaching out to the ATM networks, processors and issues for their cooperation in creating a strategy to reduce this type of fraud."

ATMIA is asking IADs and ISOs to contact the organization with details about disputes — including card issuer, withdrawal amount, length of time between withdrawal and dispute, ATM network, dispute resolution and response, and number of disputes filed by the same consumer. This information will be compiled and used in negotiations and reporting, ATMIA said.

A simple way to help reduce the problem might be to reduce the time period allowed for consumers to report fraudulent withdrawals while increasing the response time allowed by ATM deployers, ATMIA said.