Wednesday, July 24, 2024

Bank ATMs face heightened targeting

In the last two days, we have had 11 Oklahoma bank ATMs experience significant losses due to heightened ATM skimming activities.

The cards utilized were not bank customer cards, but cards drawn on another bank. The targeted ATMs were not all chip compliant, which could impact insurance coverage. On a previous similar claim, there was no coverage when a bank was held liable specifically due to the fact its ATM was not chip compliant.

If the bank’s ATM had been chip compliant, the bank that had the breach and related customer’s accounts effected would have suffered the loss. According to Judy Hanna of Bankers Insurance Agency, if your ATM is not chip compliant, card use should be limited to your customers’ cards (no foreign cards) or the machine should be taken out of commission until it can be made chip compliant.

Additionally, there have been several rapid and aggressive attacks on ATMs in Texas in the last two months. In the most recent incident, the criminals backed a truck to the ATM. Within 10 seconds, they had crowbarred the cash dispenser. A tow hook was then attached by one of the perpetrators and a second individual driving the vehicle accelerated, ripping the ATM apart. The driver circled back and picked up the first criminal who had the canisters in hand. They executed the entire operation in less than two minutes and less than one minute after the vibration alarm was activated.

Elaine Dodd, executive vice president/fraud division of the OBA, offers bankers the following guidance from industry experts:

• Ensure all ATMs are chip compliant. Then double check to be sure your software is also compliant and updated.
• Virtually all ATM cashout operations are launched on weekends, often just after financial institutions begin closing for business on Saturday.
• ATM location is critical. ATMs in rural areas are secluded and out of view of the bank may be soft targets.
• Ensure the area is adequately illuminated as thieves thrive under the cover of darkness.
• Invest in quality digital surveillance equipment on the interior and exterior of you buildings. Don’t rely solely on the ATM camera for exterior coverage. Post signs around your institution warning potential perpetrators that the branch, along with the building’s exterior, are digitally surveilled and monitored 24 hours a day.
• Consider installation of anti-theft devices, such as alarms that detect rocking, tilting or slight movement of the ATM. These devices may be wired to audible alarms or flashing lights, which serve as a greater deterrence.
• Position GPS tracking devices inside the ATM.

With this heightened criminal activity related to ATMs, banks are advised to review their insurance policy coverage requirements in the case of ATM physical, digital and skimming attacks.

If you have any physical security questions, you can contact Elaine Dodd at, or with insurance questions, Judy Hanna at