More transactions, legislation and questions of liability favor increased security at ATMs, includin

In the ATM scene of “L.A. Story,” a line of thieves waits next to a line of ATM customers. Almost non-chalantly, as each customer finishes a transaction, he or she gives the next thief in line some money-a funny illustration about a serious crime.

However, the nation recently has received a gruesome reminder of the vulnerability of the more than 500 million ATM card-carriers.

In June of 1997, Jonathon Levin, son of Time Warner Chief Gerald Levin, was allegedly tortured into giving out his ATM card access code before he was murdered, then he was robbed of $800 via an ATM in New York City.

According to New York Times reports, hopes were high that photos taken from a nearby surveillance camera would identify the murderers. However, the surveillance camera that showed Levin’s killer was too blurry for a positive identification. The camera was located at a nearby fire escape. In New York, at least one camera is required to record activity in the area of the ATM machine; however, individual cameras on each cash machine are not required … yet.

The Levin murder and other crimes fuel timely questions about ATM security and legislation, such as: What can be done to increase safety at ATMs? What is current legislation doing to decrease ATM crime? What are the trends in ATM usage, and where will security precautions be necessary?

Answers to these questions should help you decide whether ATM security is a viable niche for you.

1. Can current legislation help you in your efforts to decrease ATM crime?

Legislation regarding safety at ATMs has been enacted in 12 states. (See chart accompanying story.) In 1990, California introduced Assembly Bill 244, which regulates ATM security through the consideration of the following areas: lighting, landscaping, incidence of crime, ATM safety information, cameras, hours of operation and customer awareness.

Although ATM security and lighting laws vary, AB 244 became the most popular precedent for 11 other states motivated to implement such laws-Florida, Georgia, Illinois, Louisiana, Maryland, Nevada, New Jersey, New York, Oregon, Texas, Washington.

The states that have enacted these laws believe the safety laws set a minimum objective “standard of care” for adequate ATM security and if met or exceeded will assist operators of ATMs in the defense of allegations of negligence. The bottom line for banks, credit unions and thrifts is that compliance with ATM security laws will create a refutable presumption that the operator of the ATM or night depository has provided adequate measures for the safety of its users.

But what does this mean to a security dealer and installing contractor? All legislative remedies known to date involve physical security improvements at ATMs. Opportunities are great for creative marketing of physical ATM security products and services. Banks and credit unions are looking to partner with security dealers who can offer cost-effective products and services.

The market is exploding with new technologies that spell profit for a contractor who understands how to package the product and deliver it with value-added services to the end user.

2. Is ATM security a viable niche for security dealers?

Only you can really answer this one. However, certainly somebody should benefit from the current trend of banks upgrading their ATM equipment to comply with state laws. And, if you become familiar with the state laws and requirements, your chances of success will be even greater.

In fact, providing this service to banks may even be a relief for bankers scrambling to comply. This is a great first step to building a customer service oriented relationship and future sales.

Larry Madigan, a security advisor working as president of Madigan Security Consulting, Inc. in Edmonds, Wash., says not many security dealers specialize in ATM security, but there is a niche of security products and services related to ATM crime. “There are three markets: the ATM vendors, the security vendors and the banks who provide in-house services,” he says.

According to Michael Dan, president and CEO of Brink’s Holding Co., the trend toward off-site ATMs has opened up a huge market for ATM service revenue.

“Fifty-six percent of supermarkets now have ATMs. When a supermarket has an ATM, its sales increase 6 percent to 30 percent, plus it gets to share in the transaction fees,” says Dan.

Dan predicts 70 percent of new ATM placements will be off-site from banks. Brink’s is one company that is focusing on providing service for ATMs, in terms of monitoring security equipment functions and overall operability. Moreover, Brink’s is able to use its armored car operation to offer another aspect of ATM service. Dan directly attributes off-site ATM growth as a major factor in Brink’s 22 percent bottom-line profit growth in 1996.

Other products and services to consider offering are quality CCTV with the cameras strategically located. Madigan also encourages proper tape management, meaning surveillance cameras should not reuse the same videotape more than eight times.

Eleven-year bank security advisor Mike Ferreira of SDA Security Systems in San Diego says he believes ATM security is a viable niche for dealers. “A lot of banks and credit unions are adding a variety of cameras, motion and light sensors to ATM kiosks.”

“We need to stay vigilant and prudent in providing everything we can to help prevent these crimes from occurring,” says Madigan. “Besides, figures don’t track the number of unreported ATM crimes.”

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