ATMIA Addresses ATM Withdrawal Dispute Issues in the U.S.
Handling withdrawal disputes has become a daily, standard operating procedure for independent ATM deployers (IAD) and their processors.
Recent research commissioned by ATM Industry Association (ATMIA) and authored by the Tremont Capital Group has confirmed about 20-25 percent of ATM withdrawal disputes are fraudulent. In response to these findings, ATMIA has announced they will be launching an investigation into the issue and working with networks, issuers and processors to find ways of reducing the problem.
Fraudulent withdrawals have become an issue in the U.S. because of the robust independent ATM industry and a complex payments system. Currently, network rules and payment regulations determine how much time a customer has to file a claim as well as the length of time allotted for a response to the dispute. This is typically somewhere around 180 days for the consumer and six for the ATM operator.
A pattern of withdrawal claims on a card at a bank-owned ATM will often result in an account closure and/or card reissuance. Similar activity at independent ATMs, on the other hand, typically goes ignored. Most fraudulent claims reported at independent ATMs come more than 90 days after the event. In addition to this blind-spot, 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.
“Research completed earlier this year confirmed that [withdrawal disputes have] become a $20 million annual problem for the industry,” said David Tente, ATMIA U.S. executive director. “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 will begin collecting information about fraudulent claims and is asking IADs and ISOs to contact them with details about each instance they encounter – 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 in resolution of the overall issue.
“Triton fully supports ATMIA’s efforts to reduce the number of fraudulent claims. Triton ATMs have the option of sending journals to the Host in transaction requests, if the Host supports it,” said Belinda Hillery, technical services manager at Triton. “Journals can also be retrieved by Triton Connect or from the ATM to be reviewed. Our technical service team is also available to help.”
Tente says, a simple way to help reduce the problem may be to recommend reducing the time period allowed for consumers to report fraudulent withdrawals and increase the response time allowed by ATM deployers.