How to withdraw cash and keep bank balance intact

Bangalore Mirror

Employees of firm contracted with refilling ATMs with cash hoodwink servers of Corp Bank; losses pegged at Rs 66.58 lakh, but the scam could be much bigger

Bangalore, Nov 06, 2014: Since Automated Teller Machines (ATMs) made their grand entrance in the country, scams like the matchstick trick, glue stick trick, thermo-cam trick, skimmer trick, shoulder surfing trick, sleek trick at pouch, and sleek trick at the cash dispenser unit began surfacing as conmen used all kinds of methods to obtain cash fraudulently from the machines.

 

However, these tricks are old hat when compared to the latest ATM fraud that has taken the city by storm due to its ingeniously effortless technique. 

 

So simple is the plot that it could have been lifted straight from a Hollywood flick: 15 employees of the country’s leading cash management and ATM operations firm found a way to hoodwink the servers of a nationalised public bank repeatedly and committed brazen fraud from inside various ATMs across the city, right under the noses of the security guards and CCTV cameras. 

 

Over a period of four months, these employees - some present and some former - scammed the bank of Rs 5.91 lakh, but the total fraud committed - including by various other groups of unknown persons - is reported to be a whopping Rs 66.58 lakh. But this figure pertains to just one bank; it is likely that many more banks have been swindled through a similar modus operandi. In that case, the fraud amount could be many times over.

 

 

The deputy manager of CMS Info Systems Private Limited (Securitas Division) in Cooke Town, Shankar Pawar, recently filed a complaint with the East division police accusing 15 of the firm’s own employees of being involved in a large-scale fraud that took place in Corporation Bank ATMs across Bengaluru between mid-April and early September this year. The police are yet to arrest the accused, and the case has been handed over to the Central Crime Branch’s Fraud and Misappropriation Squad.

 

The modus operandi used by the fraudsters required scrupulous precision during execution but was deviously simple in nature. Known as the ’exit shutter manipulation fraud’, the accused would boldly enter an ATM kiosk and insert their card.

 

Once the PIN and requested amount had been keyed in, the machine would authenticate the card and account, and the process of cash dispensation would begin. Now comes the tricky part: in order to carry out the fraud, the accused would simply place their hand against the exit shutter - where the cash is normally dispensed from - for a few seconds, triggering a message that there was a fault with the shutter, to be passed on to the ATM switch inside.

 

This would cause the machine to automatically reverse the transaction in the switch, i.e. the amount requested by the accused, which had been debited from their account, would immediately be reversed/credited back to the account.

 

However, when the exit shutter was released after a few seconds, the ATM would dispense the amount previously requested since it was manually halted during the process of dispensation. Given that the physical cash would be dispensed without any amount being debited from the accused’s account, their account balance would essentially never decrease, thereby causing a loss to the bank concerned instead.

 

When Corporation Bank got alerted to the heavy and suspicious losses, they conducted an internal investigation and realised a large-scale fraud was taking place and informed the company contracted with refilling their ATMs with cash.

 

This was then communicated to CMS Info Systems along with relevant card details and supporting documents like snapshots, video clippings, and copies of electronic journals containing specifics of the fraudulent transactions.

 

CMS Info Systems then held their own inquiry and found that 15 of their employees’ salary account ATM cards had been used to commit some of these frauds.

 

Confirming the incident, deputy manager of CMS Info Systems, Shankar Pawar told Mirror, "We have filed a complaint with the police and investigations are on. The accused have not been arrested yet, and our technical team as well the bank’s main service provider has taken precautionary measures to prevent a repeat. Our legal team is also working on the case so we can determine the exact amount lost to fraudulent transactions."

 

Meanwhile, highly placed sources at the Corporation Bank stated they had implemented additional security mechanisms at the server level. "We have taken necessary steps to prevent this sort of fraud from reoccurring. This is the latest method of scamming banks using ATMs, so we have strengthened the server to block any such attempts by customers inside ATM kiosks. Old and new machines alike cannot be tricked in this manner anymore. Moreover, laymen can only commit frauds like this for up to 5-10 transactions, after which their account automatically gets blocked," a source said.

 

However, since the group of 15 employees was working together, they had reportedly figured out a method to bypass and cheat the server at a higher level, thus allowing the ATMs used to dispense amounts beyond the accused’s daily permissible account limit. 

 

When contacted, a senior police officer said there was little chance of cross-communication between different servers; however, he did not rule out the possibility that the various groups involved in the fraud were known to one another.

 

"A complaint was registered under sections 34, 418, and 420 of the IPC. We have not arrested the accused yet, but have transferred the case to the CCB’s F&M squad for a separate inquiry. We are in the process of collating large amounts of data, including video clips, copies of electronic journals, card details, and ATM locations where the fraudulent transactions took place. The total amount of Rs 66.58 lakh is what has been submitted to us by CMS Info Systems in their complaint, but the amount could be higher," the officer said.