ATM FRAUD - a novel method employed

Over a period of four months, employees 

of the Corporation Bank — some present 

and some former — swindled 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. 

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 largescale 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."