Banks snub ATM safety invention
Low-cost security PIN to protect users dismissed by industry as unnecessary

Friday, May 16, 2003

By Chris Hack
Staff writer

The first battle in one man's fight for the idea of his life will soon come to a disappointing end — regardless of whether Gov. Rod Blagojevich signs it into law.

For five years, Joseph Zingher has held the patent on software that would allow ATM customers to enter an emergency PIN — usually their normal PIN reversed — if being robbed or forced to withdraw money.

The emergency code would direct the machine to spit out money after sending a secret message to a security company or local police station.

Zingher claimed the program would be inexpensive and would only have to be installed on the main computers of the roughly 40 companies that handle the country's ATM transactions. In fact, he claimed every ATM in the nation could be hooked into the system within three months.

He's been saying that for years now.

The North Shore lawyer, who has apologetically retained the coarse manner of speaking he said he picked up in the military, has constantly found himself on the losing end of political decisions that would "make a sewer rat vomit."

Embittered by his battle with state government and one of its most powerful interest groups, the banking industry, Zingher now is promising to give one high-ranking official at the Illinois Office of Banks and Real Estate a "good ... beating if I see him on the street."

The bill delivered to Blagojevich's desk started out last year as an effort to force all ATMs in Illinois to be outfitted for the technology.

After going nowhere, the bill was reintroduced this year — and passed by both houses last week — with language simply noting that banks "may" install the reverse PIN technology if they want to.

The banks already have indicated they don't.

"We're reviewing it right now," Blagojevich spokeswoman Abby Ottenhoff said of the legislation. "We're taking a closer look at it and what the implications might be."

For Zingher, it really doesn't matter what the governor does.

"Making it optional is tantamount to declaring it unnecessary," Zingher said. "It's a joke."

What he finds perhaps most maddening is that ATMs already are equipped for the technology: Zingher said bank workers all have an emergency PIN they can enter if someone tries to rob them while they're reloading cash into the machines.

"Banks are interested in reverse PIN numbers when it's their money on the line," Zingher said. "But not when it's your (backside)."

It's Zingher's hated Office of Banks and Real Estate, a state regulatory body, that gave his proposal a decisive thumbs-down in a 1999 study. Still cited today by banking lobbyists, the study concluded:

a statewide reverse PIN system would be too expensive;

only one in 3.5 million ATM transactions results in a crime;

there's no proof the system would reduce the frequency of ATM crimes.

The Chicago area's largest bank, Bank One, has more than 1,000 ATMs that record 5 million transactions a month, according to company spokeswoman Calmetta Coleman.

"We will not be instituting the reverse PIN numbers in our ATMs," Coleman said Thursday. "Primarily that's because when our customers come in and set up a new account, we give them a list of ATM safety tips."

Banks in Illinois and across the country are sticking to the industry's long-held mantra that ATM safety begins and ends with common sense on the part of customers and proper placement of the machines — with a focus on surrounding lighting, location and landscaping — by banks.

John Hall, a spokesman for the American Bankers Association, said the industry has long been aware of Zingher's proposal, but no one's bitten.

"We're all for anything that decreases ATM crime," Hall said. "But the question is, how effective would this be?"

According to the Illinois study, using secret codes to notify police could be the last thing on the minds of stick-up victims being forced to withdraw a few hundred dollars.

"Being surprised by the threat of bodily harm is extremely stressful," the report stated. "Under these conditions, it is difficult enough for many people to remember their correct PIN number."

"It may be asking too much of a consumer to try to remember a second emergency PIN."

According to the OBRE study, it would cost the industry about $1,500 per ATM to implement the system. Zingher angrily rejects that figure as a "bald-faced lie" and claims it would only cost $25.

And he's stuck to a if-one-life-is-saved-it's-worth-it defense of the proposal: Zingher admits there could be false alarms and that some victims would be too flustered to remember a second PIN — but he insists it would work for some.

"Is there something better in place right now?" Zingher said. "The best you can do is the best you can do."

After years of unsuccessful lobbying to lawmakers and bankers, Zingher has now offered to set up every ATM in Illinois with his system without charging royalties or other fees.

"Am I a saint for doing that? Not necessarily," Zingher said. "I'm keeping the rest of the country for myself.

"I still need to make money off this somehow."

Zingher hopes the system will eventually catch on as a bank marketing tool in Illinois, and that banks in other states will sign up.

So far, Illinois leaders have been the most receptive and the only ones to even craft legislation involving his idea.

He didn't get anywhere in Kansas — even after proposing the system in the wake of a brutal ATM-related heist two years ago in Wichita that ended in four execution-style murders.

"But to say I'm disillusioned would indicate that I'm giving up," Zingher said. "I'm not."

Southtown legal affairs writer Chris Hack may be reached at chack@dailysouthtown.com or (708) 633-5984.