Independent ATMs Pose Fraud Threat

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Independent ATMs Pose Fraud Threat

NEW YORK -- Convenience stores offering ATMs could be losing some cash-seeking customers if the New York Public Interest Research Group has its way. Consumer advocates are telling customers to avoid stand-alone ATM machines due to the latest fraud where a phony ATM in a New York convenience store captured money from customers.

According to Newsday, advocates say independent ATM's, which are not run by banks, are not licensed or regulated and are therefore far riskier to use.

"This is a glaring loophole in the law, which has enabled scams like this to happen," said Russ Haven, legislative counsel at the New York Public Interest Research Group. "We have brought this up to the New York State Banking Department and plan to bring it up again."

One of the largest bank machine frauds occurred in Canada when thieves installed five fake ATMs in convenience stores last year throughout lower British Columbia, stole personal banking information and bilked customers of $1.26 million, the report stated. Two men were convicted of the crime in September.