ATM regulations
June 25, 2005 3:11 AM   Subscribe

Who regulate ATMs in California?

A few days ago an ATM shortchanged me. I went to an ATM operated by my bank (Downey Savings) inside a grocery store, requested $100, and got $40. I was pretty shocked at first but I got angry when I found out that; the machine had been malfunctioning all day, the store refused to put an out of order sign on the machine because "it's not our property", and that the store thought it was sufficient to put a basket in front of the ATM. I immediately called the 800 number posted on the machine and was told that I had to go a branch and fill out a dispute form. I did that. The teller explained that the machine would be audited and the bank would get back to me.

Two days later the machine is obviously being used again and nothing has happened so I call the bank. The person on the other end explains to me that the ATM department doesn't have my original paperwork. This is odd since I saw the teller fax my form back to the ATM department but now it seems that only the original will do for some reason and instead of telling me that this is likely to resolved soon the customer service rep starts thowing five business days at me.

I have to wait the five business days but I'd like to know if I have any legal leverage here. Who regulates ATMs and how can I find what regulations apply to this situation? This happened in California.
posted by rdr to Law & Government (7 answers total)

posted by rdr at 3:32 AM on June 25, 2005

Downey Savings appears to be a federal savings and loan association. So they are supervised by the Treasury Department's Office of Thrift Supervision. Here's their consumer assistance guide.

But you know, you should really talk to a manager first.
posted by grouse at 3:45 AM on June 25, 2005

ATMs are owned by the bank who runs them. There is no separate agency who regulates them or their use. If you have a discrepancy in an ATM transaction, the best bet is to go through the institution who owns the machine, and in this case, appears to be your own bank.

ATM machines generally are "loaded" once or twice per week and "balanced" once per business day. Most institutions have a back-office department that does the actual balancing and it will indeed take 1-5 days for your issue to be sorted out. Banks will sometimes give provisional credit to you if you are their customer, so check with the manager if you need to expedite the process.

With regards to your questioning why the machine wasn't shut down or put out-of-order, you need to realize that each transaction is processed separately in the ATM. This means that the person who came before and after you to use the machine may have had no problems, while you did. It's random, and just because there was one issue, doesn't mean the entire machine isn't working properly. Generally it is just a question of the bills that should have been spit out to you were routed through the divert bin instead. This happens more than people realize and is usually a result of the quality of the money that is loaded into the machine.

We can probably help more if you expand on why you're looking for more "leverage" when you admit you understand you have to wait the five business days. It appears to me as if there are two separate issues: the machine having several errors over the past few days, and your bank not handling your complaint efficiently by "losing" your claim.

Are you trying to get your money sooner? Are you trying to ensure Downey Savings closes the machine down? Be a little more specific and those of us in the finance/banking field can probably provide some more guidance.
posted by cyniczny at 11:16 AM on June 25, 2005

Ok. The machine was malfunctioning frequently enough that the supermarket was aware that they should post an out of order sign but they didn't want to take that responsibility. That means that Downey Saving must have had a series of complaints and that they did nothing. The least they could have done is to take the machine offline. That makes me angry and leads me to question the competence of Downey Savings but it isn't something that I expect Downey to change.

The problem is that I don't trust Downey to resolve this. When this first happened I was told the resolution would probably be quick since the ATM was one of their machines. Since the machine is back to normal use I presume they've done their audit. What makes me nervous is them stating that the reason that nothing had happened is that they didn't have my original paperwork. This requirement for the original paperwork only appeared two days after the money was lost. What I want from any institution that has my money is predictability. I would have felt better if Downey had simply told me that I had to wait five days rather than waiting two days and then giving me an explanation that I don't believe.

If at the end of five business days my money is restored, then I'll close the account and move on. If instead, another requirement magically appears, then I'd like to know who I can lodge a (probably futile) complaint with. I don't expect that any regulators will actually help but at least going through the process will make me feel better. Also, if I know what my legal rights are it might help during any conversations I have with Downey.

Thank you for your answers so far. The pointer to the Office of Thrift Supervision tells me who I'll write to if this doesn't get fixed. I was also unaware that ATMs miscount frequently enough that I would be likely to run into a problem.
posted by rdr at 3:36 PM on June 25, 2005

This may not be true for all ATM's, but I remember reading that:

ATM's have a separate mechanism, wholly independent of the keypad and data communication electronics, that counts the bills actually dispensed.

This amount is compared to the amount keyed in and the amount debited from the account on some regular basis (daily, weekly?). If there is a discrepancy, the "bills dispensed counter" trumps all.

Have you seen the ATM transaction appear on your paper/online statements yet? It may very well show up as $40 instead of $100, even though $100 is what you keyed in.

Then again, I could be completely wrong.
posted by de void at 7:35 PM on June 25, 2005

"Joe, who own the Chiefs?"
"Owns, owns!"
posted by kindall at 10:34 PM on June 25, 2005

Dude. Stop screwing around with the bank and call the cops.
posted by pwb503 at 4:30 PM on June 26, 2005

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