ATM issue shows bank tech’s downside

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If you read this blog with any regularity, you know I’m a big fan of banking automation. Like some of the people reading probably, I remember the mad rush to get to the bank before 5 to make a deposit — and I’m glad it’s largely obsolete.

Yep, when banking automation is working well, it saves us an enormous amount of time and trouble. But when it turns on you, watch out.

That’s exactly what happened to a friend of mine in New York recently, when she tried to deposit cash at a Chase ATM. Little did she know that because of an ATM error, that cash wouldn’t see her checking account for 39 days:

On April 2, I deposited $480 in cash at a Chase bank ATM, where I have three accounts. I heard the machine whirr as it accepted my bills. And then the screen told me that the transaction was unable to be completed. The ATM spat out a slip of paper saying the same thing, with a number to call to file a claim.

The next day, I called the number and filed a claim. Two business days after that, I received a credit for the amount. On April 25, the credit was reversed, and the claim was closed. (Chase said) that after the investigation, the transaction had in fact been completed properly.

I called the Claims Department, who repeated what the claim asserted, but said that if I could find the receipt I received (from three weeks ago), they might be able to help. I had lost track of the slip by then.

On April 28, I went to the bank branch where I made the deposit, shared my story, and the personal banker called Chase and was transferred a few times. After speaking to a representative, he said there was “nothing he could do on his end” if the claim was already investigated and the credit reversed. He said that a technician came by and checked the ATM I used, and there was nothing in the “misfire bin,” which is where all the errors go. I asked him if they had access to security footage, and he said no.

The woman he spoke with on the phone only had one document she could send him. It was the claim file that I had open on my laptop at home. The personal banker recommended I call customer service, and I decided to close two of my three accounts.

I called Chase’s customer service line, and was rerouted to the Claims Department. The rep on the phone said there is nothing that they can do over the phone, and that I need to go the Chase branch and try again.

He said that the people at the branch need to check the data again for the ATM, and then check the video footage. I told him what the personal banker told me, to which he replied, “Due to privacy laws, ma’am, they are not allowed to show you the footage. You would need to go to a judge and ask for a court order.”

On May 4, I went back to the bank branch, this time with firm-voiced boyfriend. Another personal banker got on the phone, and then escalated the issue to a supervisor. I was told they were going to send someone back out to the ATMs to be checked again; this time all the machines would be checked, but that it would take another week.

On May 11, I called Customer Service to check on the status, and was routed to the person handling my case, I think. She says after checking all the machines, they found the money, and the amount has been deposited into my account. The issue should be resolved.

I reached out for a comment from Chase about my friend’s experience. Here’s what a Chase spokesman had to say:

There was an error with the ATM, and we have fully reimbursed the customer. This situation was not typical, but we are taking steps to try to avoid similar ones in the future.

Bank mistakes are inevitable, and my understanding is, as the Chase spokesman pointed out, glitches like this are fairly rare.

But even if they happen in 0.001 percent of cases, with the billions of ATM transactions that happen every year, you’re talking about tens or even hundreds of thousands of errors. And whether you’re talking about ATMs, online banking or mobile banking, the increasingly central role of tech means banks need to get better at investigating and remedying computer errors, even if that requires giving customers the benefit of the doubt because there’s no flesh-and-blood teller to question about what happened.

To its credit, Chase eventually did the right thing, but I can think of a lot of circumstances where losing $480 for 39 days could result in evictions, repossessed cars and other adverse financial consequences for customers. Asking customers to bear those consequences over what amounts to a rounding error on a bank balance sheet doesn’t seem like a great way to do business.

What do you think? Have you ever experienced an ATM error? How did you — and your bank — handle it?