Should ATMs have a panic button?

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There’s long been an urban legend circulating that if you’re in trouble at an ATM, you can dial in your PIN backward to summon the police. But, unfortunately for victims of ATM robberies and the violence associated with them, that’s not the case.

It seems likely such a system may have helped police intervene in the recent kidnapping and murder of a young woman in Boston who was driven to five ATMs in the area and forced to make withdrawals before being stabbed to death. From the Boston Herald:

Amy E. Lord spent 47 minutes driving between five banks in Boston early Tuesday after being kidnapped in her South Boston neighborhood by at least one attacker, a kidnapping that ended with the woman being murdered and her body being dumped in the Stony Brook Reservation in Hyde Park, officials said.

Boston police said Lord was taken in her Jeep between 6 a.m. and 6:47 a.m. to banks at the following locations: East Boston Savings Bank, 501 Southampton St.; Metro Credit Union, 1071 Massachusetts Ave.; Bank of America, 555 Columbia Road; Sovereign Bank, 585 Columbia Road, and Citizens Bank, 217 Adams St.

The technology that may have helped Lord alert police that something was wrong has been around since at least 1994, when inventor Joseph Zingher patented a reverse-PIN alert system called SafetyPIN.

But Zingher has been unsuccessful in marketing the technology to banks, according to a 2010 report by the Federal Trade Commission. State bills that would have mandated the use of the technology have been considered in Illinois, Georgia and Kansas, but were defeated or watered down across the board.

The same report found that ATM crimes are relatively rare when compared to the number of trouble-free transactions, with only one crime per 3.5 million transactions. But the sheer volume of ATM transactions — 11.8 billion transactions per year in 2008 alone, according to the American Bankers Association — means that every year there are thousands of ATM-related crimes like the one that ultimately took Amy Lord’s life.

Of course, like any safety technology, there is a host of potential downsides. Detractors point to the possibility of “fat finger” errors on the part of ATM users, causing false alarms for law enforcement. And it’s unclear whether police in many areas would be able to respond quickly enough to make a difference, according to the FTC report.

Then there’s the cost: an estimated $10 million to add the technology to every ATM in the nation, according to the report.

But considering the price Americans pay to use an ATM is constantly rising — it’s up to $2.50 on average, according to Bankrate’s most recent checking study — maybe banking customers deserve a little added safety and peace of mind for their money.

What do you think? Should ATMs have some kind of “panic button” to alert authorities a crime is taking place? Or are ATMs fine as is?

Follow me on Twitter: @ClaesBell.

Senior banking reporter Claes Bell is a co-author of “Future Millionaires’ Guidebook,” an e-book written by Bankrate editors and reporters. It’s available at all the major e-book retailers.