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 Post subject: ATM crime = limited access to cash
PostPosted: Fri Jan 04, 2008 12:56 pm 
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http://redtape.msnbc.com/2008/01/atm-crime-wave.html

Citibank is using the rather blunt instrument of lowering some customers’ daily ATM cash withdrawal limits to fight a recent spate of cash machine fraud. The company said Thursday that the change impacts "a small population of customers" in New York City, but would not provide additional details.

It's not clear how much daily withdrawal limits were lowered, but the New York Daily News spoke with one consumer who said her limit had been cut in half.

"Though we can't provide details of ongoing security investigations, we are working closely with law enforcement on this matter," Citibank said in a statement to msnbc.com. "We continue to monitor our customer accounts for suspicious transactions and encourage customers who notice suspicious activity to call our customer service unit at the number on the back of their ATM cards."

Consumers who suffer fraud aren't liable for the losses, if they report the missing money in a timely fashion. Those who need extra cash can call Citibank and ask that their daily limits be raised.

But lower cash withdrawal limits may have a more serious impact in New York than elsewhere. Many New York City restaurants, for example, don't take credit cards, so customers often must scurry to ATMs in order to cover their bills.

This is at least the second time that Citibank has curtailed access to cash in response to a fraud outbreak. In March 2006, overseas travelers found they couldn't withdraw any money from ATMs in places like Canada or Russia. Later, it was revealed that criminals had managed to steal ATM card numbers and PIN codes from an outside source, prompting the abrupt security measure.

Citibank wouldn't answer questions about the incident that led to the recent limits on cash withdrawals. Spokesman Rob Julavits said the lower limits were imposed only on New York City consumers, but wouldn’t explain why the fraud was geographically limited.

Doug Johnson, senior advisor for risk management policy at the American Bankers Association, said lowering daily withdrawal limits is a standard tool used by banks to fight fraud.

"Institutions, once they find fraud that's serious enough, they will take action. It's not unusual," he said.

He would not comment on the Citibank incident, but when asked if consumers in other parts of the country might be at risk, he said, "I wouldn't focus just on New York." He wouldn’t provide specifics, saying only that banks around the country are constantly fighting ATM fraud.

'Consumers ... deserve more'
Avivah Litan, a bank security expert with consulting firm Gartner, said Citibank's strategy in dealing with this latest round of fraud -- limiting consumers' access to cash -- was disappointing.

"Consumers expect more both in terms of security and convenience and frankly, they deserve more," she said. "This will probably serve as a wake-up call to Citi to invest more in enterprise fraud detection and stronger card security systems. There are certainly good technical solutions that can detect fraud with a fairly high degree of confidence. ... The problem is banks like Citi don't typically invest in these solutions until they either have to in order to comply with regulations, or because they are getting hit hard with fraud losses or loss of consumer confidence."

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