CAPITOL HILL Saipan — Legislation regulating operations of privately-owned automated teller machines to protect consumers and businesses from “miners” who might steal personal information and money through devices inserted in ATMs is under review by the Northern Mariana Islands House of Representatives.

Rep. Ray N. Yumul who introduced House Bill 15-36 on Jan. 18 said his measure would also address concerns about discrepancies that users of these ATMs notice when comparing the actual amount they had withdrawn with what was recorded on their receipts.

There so far has been no report about an ATM user losing money to “miners” but lawmakers said H.B. 15-36 would prevent these incidents which are reportedly rampant in the United States from happening in the NMI.

“The (House Commerce and Tourism) committee (to which H.B. 15-36 has been assigned) is still investigating how non-bank ATMs can get a client’s card’s personal identification number ” Yumul said.

Paul Trombetta general manager of Pacific Amusement Inc. the sole operator of about 40 privately owned ATMs in the NMI told the Journal that “any ATM can be tricked to steal a card and PIN even bank ATMs.”

Trombetta said “Most commonly a crook will place a device temporarily on an existing ATM and the unwitting customer would try to withdraw cash but nothing would come out. The crook would later pick up the device and use the information gathered to make cards with which he would then use to withdraw money.” He also said that privately owned ATMs are actually less likely to be used for such a purpose because “we visit our ATMs more frequently than banks do so we would notice such a device attached to our machines more quickly.”

Trombetta said it would be more difficult for “miners” to detect an ATM user’s PIN with the new triple encrypted PIN pads now in use. The House Committee on Commerce and Tourism sought Trombetta’s input on the legislation.

In his written testimony Trombetta requested that the committee rewrite the measure “so that the thrust of it would be that any person associated with the ATM business including any company that banks may hire would have to go through a due diligence and licensing process.”

‘This would not prevent crooks from coming to our island and setting up dummy ATMs for the purpose of mining card numbers and PINs but it would help identify legitimate businesses which would be screened before being licensed. A license sticker will also ease customer concerns with using a terminal knowing that they are dealing with a legitimate terminal ” Trombetta wrote in his testimony.

Yumul who is vice chairman of the committee said the committee is working closely with Trombetta to further iron out H.B. 15-36 and address all concerns including discrepancies noted in receipts issued by privately owned ATMs. He said “This is already starting to be an issue.” There have been complaints by users of privately owned ATMs claiming disputable receipts that indicated they supposedly withdrew a bigger amount.

Yumul said it is difficult to verify disputed receipts issued by these ATMs because the machines are not directly owned by the banks. “When you make a withdrawal from a bank-owned ATM and you noticed a problem in your balance account you can easily go to the bank; with non-bank ATMs the problem is you almost have no recourse because private businesses are operating these machines.”

Trombetta said that was not accurate. “All ATMs provide a receipt to the customer. Plus all customers can verify the amount withdrawn with their bank statement. All transactions on our ATMs process in exactly the same way as a bank-owned ATM ” he said.

In his testimony Trombetta said “For the most part all the worries and concerns indicated in the bill are unfounded. Even in the absence of local law regulating ATMs it is important to note that our ATMs are sponsored by banks insured by the Federal Deposit Insurance Corp and all transactions are certified by the sponsoring banks ” Trombetta said.

H.B. 15-36 states that “in the absence of … law regulating their operation the number of non-bank ATMs in the CNMI has increased significantly. In order to ensure the security of customer information that can be obtained through the use of such machines as well as customer safety in locations where they are located this Act proposes to establish necessary safeguards for the operation of nonbank ATM machines….”

The bill would require operators of privately owned ATMs to register with the director of the Department of Commerce’s banking division including operator’s name address phone number; name and addresses of where the ATMs are located; types of transactions available; and the processor’s and servicing agent’s names addresses and phone numbers among others.

The bill would also:

• Require an annual $50 registration fee for the first ATM and $25 for each additional ATM;

• Require an operator to conspicuously post a sign by the ATM disclosing pertinent information including name address and 24-hour toll-free number where a client may direct inquiries or complaints;

• Allow an operator to charge a service charge but only if the fee is “clearly and conspicuously disclosed electronically during the course of transaction in a manner that permits the customer to cancel the transaction without incurring a fee;”

• Require ATMs to provide receipts containing all information about the transaction;

• Require an operator to provide “adequate security” in the ATM’s premises. MBJ