What you should do if ATM dispenses fake notes
TNN | Oct 21, 2016, 04.29 PM IST
CHENNAI: When a Corporation Bank employee withdrew 27 fake bank notes from an ATM in Chennai this month, the spotlight is back on ATM security and customer protection. For customers, who get fake notes out of an ATM, usually there is no legal recourse as it becomes very difficult for them to establish the source of the fake note.
Tamizharasan was luckily a bank employee, and he immediately noticed that the notes were fake. He registered a police complaint, and the bank has promised to reimburse him. But in the case of many customers, that doesn’t happen.
“Once you get fake notes from an ATM, the problem is establishing the source – that it was the ATM machine, the bank’s network at fault and not the customer. Banks are never going to give real notes for counterfeits based only on the customer’s word. It is actually a little worrying as this is the second case we noted in this month,” said cyber-crime officials in the city.
In recent months, there have been a few other cases of fake currency notes being dispensed from ATMs in different metros in India.
The Reserve Bank of India has set out guidelines for banks that they will need to check all the currency notes received before accepting notes from depositors. Banks again have to check the genuineness of notes before sending them for refills at ATMs. If banks are employing ATM management agencies, then the onus is on the agencies to check the notes before loading the ATMs.
“In the confidence that they have hired professional ATM managers, some banks might not be rigorously checking the notes that enter their system. If the incident had happened to someone, who was unconnected with the banking industry, then it is possible that it would have been a dead loss to them,” said cyber-crime officials.
On an average day, banks load Rs 3-4 lakh in intra-city ATMs and Rs 1-2 lakh in suburban area ATMs; in high-traffic zones like T Nagar, Parry’s, Koyambedu, where there are high footfalls, ATMs are loaded with up to Rs 10 lakh a day. The RBI has mandated that banks should be equipped with proper authentication machines.
“We have currency checking machines, and check the currency notes for counterfeits, soiled and torn notes everyday. We start checking the notes as soon as the branches open at 9.30am and the ATM agents’ vans normally come to pick between 11am and 12pm. There is a rigorous system in place,” said N Raghunathan, vice-president, Lakshmi Vilas Bank.
Police recommend that customers, who have received fake notes from the ATM, hold up the fake ATM notes in front of the CCTV camera. “If the camera is not working, there will be a guard at each ATM. It is better to try and raise the complaint at the ATM itself as it will be more difficult to prove the origin of the note, once a person steps out of an ATM,” said cyber-crime officials.
Most of the newer ATM range, brought out by ATM managers like FSS, AGS, CMS and OEM makers like Diebold, NCR and Hitachi have ATMs with technology for reliable banknote recognition and handling. “Our intelligent ATMs can now detect counterfeits during both cash deposits and cash withdrawals,” said Ravi Goyal, chairman & MD, AGS Transact Technologies Ltd.
However, many banks still have ATMs that are 12-14 years old and with outdated technology. “Now that the RBI has mandated that all ATMs must be EMV-enabled, you can expect an overall upgrade in the industry and security at ATMs to go up,” added Goyal.