Video cameras fight hole-in-wall fraud

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The Independent Online
Hidden video equipment has been installed inside cash machines around the country in an experiment aimed at reducing rising levels of cash-card fraud.

The cameras, undetectable behind black plastic screens, take pictures of customers as soon as they insert their cash-cards. The time and place of the transaction, and the amount involved, are superimposed.

Twenty of the cameras are operating in cash machines belonging to the Alliance & Leicester and Derbyshire building societies. John Whitehouse, a spokesman for the manufacturers, Quadrant Video Systems, told the Independent on Sunday that the company was in the final stages of talks with leading banks, including Barclays, the Midland and Lloyds.

The experiment has already helped police in the East Midlands to arrest vandals. But the banks and building societies are more interested in using the cameras to attack fraud and eliminate bitter and damaging disputes with customers over 'phantom' or disputed withdrawals.

Many bank customers have complained that money has been taken from their accounts by cash machines on days and at times when they are convinced that they made no withdrawals. But the banks have refused compensation, arguing that the cash machines' technology is foolproof and counterfeit cards cannot be made. Most 'phantom' withdrawals, they say, are the work of friends or relatives 'borrowing' cards.

Other customers, reporting that their cash-cards have been stolen and used to steal their money, have been infuriated by banks' suspicions that they are still secretly using them themselves.

At the High Court in London next month, Dennis Whalley, a solicitor in St Helens, Merseyside, has organised a multi-plaintiff action against Lloyds, Barclays, the Westminster Building Society, the TSB and the Midland. Mr Whalley's nine clients claim that certain withdrawals from their accounts were not made using their cards. The case will be the first full public examination of the issue.

The video cameras could save the banks a lot of bother. If customers disputed withdrawals, the pictures of the transactions would prove who had made them.

Where criminals were responsible, the pictures could be passed to the police. Criminals could disguise themselves by using crash helmets or balaclavas, but Quadrant is working on new technology that would stop the cash machine from working unless its camera could 'recognise' an uncovered face.

Britain has 18,000 cash machines; at pounds 1,500 apiece, it would cost pounds 27m to install cameras in all of them. But they are being seen as a relatively cheap, short-term answer to fraud, while 'super- smart' cards offer a long-term solution. Super-smart cards have their own mini-keyboard where customers type in PIN numbers before inserting them into cash machines.

Mark Lomas, head of Cambridge University's computer laboratory, who investigates card and cash machine technology, said: 'Videos will be good for certain disputed transactions and could halt opportunist theft. But it must be seen as part of the solution to card fraud rather than the whole solution.'

He would like the super-smart cards to be introduced.

'Two years ago Visa brought out a prototype super-smart card. Although the card cost pounds 50, mass production could bring this down to about pounds 2, twice the cost of the basic magnetic strip card now in circulation. Replacing all 45 million UK cash-cards with a smart card could cost nearly pounds 100m.' (Photograph omitted)

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