Regulators skeptical about PIN technology designed to thwart ATM robberies

By Michelle Singletary
Thursday, May 13, 2010

I've played out in my head many times what I would do if I were abducted and forced to withdraw money from an ATM.

Well, first, if the lowlife took me to an automated teller machine not owned by my bank, I'm sure an alarm would go off, because I never use other banks' ATMs to withdraw money. The machine would say "What?!?" and immediately spit out my card.

Okay, that wouldn't really happen, but it's my delusion.

I've also thought about entering the wrong PIN so many times that the ATM would freeze. But that would surely anger my abductor.

I've even imagined pushing a panic button on the ATM that would summon the police.

Interestingly, the Credit Card Accountability Responsibility and Disclosure Act of 2009, or Credit CARD Act, contained a provision for the Federal Trade Commission to study and report to Congress on the cost-effectiveness of making available emergency PIN technology so that a banking customer who is under duress could alert a local law enforcement agency electronically.

This week, the FTC issued its report, more than two months overdue. With a lot of "we don't know," the agency couldn't recommend anything.

Specifically, the FTC was asked to look at "emergency PIN" or "reverse PIN" and "alarm button" technologies. An emergency PIN would allow a customer in trouble to enter some variation of the regular PIN to summon police. With a reverse PIN, a customer could punch in the number backward, which would alert authorities that a robbery was in progress. So if your PIN was "1234," you would hit "4321." The reverse PIN has been rumored for years to be installed on ATMs, but this is an urban legend.

The FTC discussed another emergency PIN system that has been unsuccessfully marketed to banks. "ATMOnGuard" requires a customer to punch one number after the PIN. The additional number would indicate whether the transaction was being conducted under duress.

Really, all the electronic-alert options sound feasible to me.

But it took the commission 38 pages to conclude that the available technology probably wouldn't "deter any type of ATM crime, and in some instances may actually increase the risk of danger to ATM customers." Oh, and even if the technology were effective, the cost of implementing an emergency PIN system could be substantial, although the agency could not provide any estimates.

Although news reports of ATM customers being robbed might seem frequent, there are few statistics that track ATM robberies in which a victim is compelled to withdraw funds. What evidence there is suggests that the majority of ATM robberies occur after the victim has withdrawn funds, which means an emergency activation system involving the keypad wouldn't help.

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