Of all the equipment used in modern banking, few devices are more important than the ATM. There are more than 3 million ATMs all over the world, including roughly half a million in the U.S. These machines provide a vital service for consumers, allowing them to obtain cash quickly and securely without going to a bank. But they are also vulnerable to errors and fraud, which can put their users’ money at risk. It is thus essential that you understand the ATM withdrawal dispute process, how it can help you, and what can go wrong with it.
What Are ATM Withdrawal Disputes?
ATM withdrawal disputes occur when someone challenges the outcome of an ATM transaction. They can happen under a number of different circumstances, including when there is:
- An Unauthorized Withdrawal: If criminals are able to obtain your card or bank information, they may withdraw money from your account using an ATM. When this occurs, you’ll likely see a record of the transaction on your bank statement; alternatively, if the activity looks suspicious, your bank might contact you and ask if you made the withdrawal.
- A Lack of Funds: In some cases, you may attempt to withdraw money using an ATM, but the machine won’t give you any cash. But when you check the receipt and your bank statement, you’ll see the money was taken out of your account anyway. This is usually the result of a processing error; you’ll need to dispute it in order to get your money back.
- Other Processing Issues: Besides failing to provide cash, ATMs may deliver the wrong amount of cash, credit more cash from the account than you received, or charge you twice for a single transaction, among other errors. All these issues should be dealt with through the dispute process.
If you live in the United States, you have 180 days to dispute an ATM withdrawal. Once you file the dispute, the operator has six days to investigate it. If they find evidence of an error or fail to prove the error didn’t occur within the allotted time, they will restore any assets you lost. But if they can prove that there was no error, they do not have to return any money to you.
How Serious is ATM Dispute Fraud?
While the dispute process protects consumers against fraud and errors, it also raises the risk of fraud against ATM operators. In some cases, consumers will steal money by disputing nonexistent or valid transactions. Because many ATM operators don’t keep transaction records for more than 90 days, fraudulent disputes can succeed if they are filed after 90 days but before the 180-day cutoff period. ATM operators lose more than $20 million a year to this form of fraud.
To deal with this problem, operators are advocating to reduce the amount of time in which consumers have to file a dispute. They are also demanding more time to investigate disputes. If successful, this could protect operators against fraud, though it might also make it more difficult for consumers who have valid disputes to file them on time.