In a common ATM-theft scenario, a burglary ring steals a pickup truck and crashes through the plate-glass window of a convenience store. Once inside, the thieves loop one end of a chain around the ATM and attach the other end to the truck’s trailer hitch or bumper.
Then they gun the engine and yank the machine from its moorings.
Throwing the battered ATM into the bed of the truck, they make their escape to the relative security of a secluded cornfield or abandoned warehouse. There, they can bide their time to assault the ATM with crowbars, power saws, cutting torches, grinders, drills, explosives or expanding gases to extract the cash.
Other thieves, perhaps with a background in construction work, begin by swiping a backhoe, front loader or other piece of heavy equipment from a building site. They crash into a nearby bank branch or drive up to an island outside a bank and jam the hydraulic arms of the machine into an ATM to rip it asunder and gain access to the cash.
No one wants to admit how many ATMs fall victim each year to “ram raids” such as these or to “stealth” attacks by criminals who enter a building less ostentatiously to quietly brutalize the ATM without removing it from the scene.
But despite that reticence about providing actual numbers, sources agree that theft of cash from ATMs is rising at an alarming rate. They also point to potential problems with the armored vehicle carriers that transport cash to ATMs. And they see ATM deployers as far from defenseless against even the best-organized gangs of desperadoes.
No doubt, a thief hatched the first scheme to steal cash from an ATM just minutes after the device was invented.
But few thieves had crashed into a store with a stolen truck to attack an ATM before that plot line appeared on a television reality show seven or eight years ago, says Tom Stevenson, president of Cash Connect, a Newark, Del.-based company that provides cash to ATMs.
“After that was shown on television it turned into at least a weekly occurrence around the U.S.,” Stevenson says.
In the past 18 months, the favored method has shifted from ram raids to stealth, but the incidents continue to increase, says Mark Coons, president and CEO of American Special Risk, a Charlotte, N.C.-based insurer. The number of attacks on ATMs rose 10% to 15% from 2009 to 2010, and one out of every 100 of the nation’s ATMs is robbed of cash in a typical year, Coons says.
The depressed economy contributed to an increase in ATM cash thefts, according to Mark Lowers, president and CEO of Lowers & Associates, a Purcellville, Va.-based risk-management firm.
“In a poor economy, people do desperate things,” Lowers says.
Dallas, Houston and New York have earned reputations as hotbeds for ATM thefts, but the problem actually occurs nationally and shifts from one region to another as gangs form, dissolve or land in jail, says Coons.
A host of events can affect the geographic distribution of ATM thefts, he notes. The evacuations caused by flooding in the wake of Hurricane Katrina, for example, sent enough New Orleans criminals into exile in Texas to set off a wave of ATM crimes in Houston and Dallas, Coons says.
“This year, we’re not seeing a specific area,” he says. “It’s across the board.”
The increasing danger to ATMs likely will drive up the cost of insurance premiums and encourage deployers to risk higher deductibles to save money on premiums. But deployers can hold down the cost of their own premiums simply by doing more to guard against theft, Coons says.
Putting Up A Defense
The best way to protect ATMs is to refuse to place them in risky locations. Vulnerable areas include not only the crime-ridden inner city but also rural areas where no one lives nearby to hear the noisy work of stealing an ATM.
Stores that close for the night also leave ATMs on the premises vulnerable to attack, Coons says.
American Special Risk measures loss two ways: by severity–the amount stolen–and by frequency, or the number of thefts.
“I’ve always felt it easier to attack severity by lowering the amount of cash in the ATM,” Coons says
A deployer with an ATM in a bad part of Chicago, for example, should keep $5,000 in the machine instead of $50,000, he suggests, emphasizing that “managing the amount of cash exposed is pretty important.”
Some deployers protect their ATMs with alarms. Dax Bosnich, owner of Cincinnati-based Bullhorn Alarm LLC, began rigging alarms after one of his own 80 ATMs was robbed.
“When that happens, it makes you sick,” he recalls of the 2002 theft of about $2,000.
Bosnich started offering the alarms to other deployers in 2005 and has sold 6,000 of them at $399 each, he says.
Among the $25 optional accessories is a third siren that augments the standard pair of sirens and increases the racket to 120 decibels, just short of the 130 decibels of a rock concert, according to Bosnich.
Tilt and light sensors detect attacks, and the alarm goes off briefly if the ATM is nudged. But if the sensors determine the machine has been tampered with more seriously, the alarm can go off for 10 hours, making transporting the machine to another location a dicey proposition for the thieves. The alarms also can send alerts to the deployers’ computer or to local law enforcement, Bosnich says.
Just the alarms’ LED lights alone appear to discourage tampering with the machines, says Greg Taylor, whose Belleville, Texas-based T&B Investments deploys ATMs in several Texas towns.
Deployers also use special systems to anchor ATMs to the floor to prevent thieves from removing them.
One such anchoring device, the ATM Raminator, sells for $500 to $1,000, the supplier says. Richard Gould invented the device in 2006, and Australian-based Lockit System Pty. Ltd. manufactures it. The U.S. distributor, The Security Center Inc., is based in Dallas and services 100 dealers.
The ATM Raminator holds the machine to the floor during an attack because a heavy plate beneath the machine deforms in a controlled manner, thus reducing the shock. Transferring that stress from the concrete floor prevents the pulverization of the concrete that undermines the usual tie-downs, says Gary Akey, The Security Center’s operations director. Special bolts also help anchor the device, he says.
ATMs tethered by the product have not dislodged after being struck 22 times by a Land Rover, according to Akey.
ATM makers themselves, including Diebold Inc., are taking measures to make their machines more secure, says Chuck Somers, the North Canton, Ohio-based company’s vice president of ATM security and systems.
Diebold uses sensors for intrusion, pressure, gas, tilt and motion, Somers says. Besides alerting authorities, the sensors can trigger the ink packs that dye currency an incriminating color, he adds.
The company’s ATMs also can come equipped with global positioning system technology to track stolen ATMs, Somers says.
Some deployers take measures to protect cash already loaded into ATMs, but they also should consider the safety of their assets while in the hands of armored truck carriers, says Cash Connect’s Stevenson.
ATM deployers took notice early last year when the U.S. Attorney for the Southern District of New York indicted the president and the chief operating officer of Mount Vernon Money Center for allegedly defrauding customers of $50 million.
The company, located just north of New York City, replenished cash in 5,300 ATMs, according to an FBI report, in which authorities claimed that between 2005 and 2010, the firm commingled cash from clients and skimmed funds for their personal use.
Another armored-carrier incident also affected many ATM-industry executives, observers say. Last summer, four masked men brandishing assault rifles were waiting when a lone security guard arrived to start his shift at a St. Louis armored carrier’s office, according to published reports, which said the gunmen escaped with more than $4 million.
Standard policy at most cash-handling facilities dictates that no one works alone, says Stevenson.
Industry Response
In response to those celebrated cases and other lesser-known crimes, Cash Connect enlisted the help of Lowers & Associates and American Special Risk to write a best-practices guide for armored carriers and ATM-service companies, Stevenson says.
The book is available to deployers through the ATM Industry Association, says Mike Lee, association CEO.
The guide can serve as a template for deployers, reminding them of what questions to ask when they choose an armored carrier, says Coons.
Cash Connect also has surveyed armored carriers to determine which best practices they follow, Stevenson says. After assigning weights to the practices, Cash Connect intends to arrive at a score for each carrier. The company then plans to share the scores with deployers who are choosing carriers to deliver their cash, Stevenson says.
“We think the ISOs and cash providers need to drive the change,” Stevenson says of making ATMs safer from theft. “It’s us and our customers that are going to have to pay for all those thefts, ultimately through paying higher insurance premiums and deductibles.”
And they can do that by incorporating every method of safeguarding cash, says Diebold’s Somers.
“I don’t believe in a silver bullet,” he says.
But deployers who use every means available can make themselves less vulnerable to criminals who decide to grab a Sawzall, steal a Bobcat loader and wreak havoc on someone else’s property.
