How Cash Trapping Is Forcing Banks to Re-evaluate Their ATM Security

Let’s be honest: Many bankers have long thought, “That kind of scam? Not in my bank.” Maybe it’s the pride of a spotless operations record, or the confidence that no outsider can outsmart vigilant staff and robust technology. Whether due to pride or confidence, this reputation-driven outlook forged American banking’s hallmark of trust. 

Yet it’s exactly this mindset that fraudsters now exploit. 

ATM fraud, especially cash trapping, has become a threat that doesn’t care how clean a bank’s brand is, how strong its relationships are, or how many years its team has gone without a reported incident. The risks are industry-wide, the attackers are relentless, and regulators are watching. 

Last summer, Plano, Texas, became a focal point for cash trapping. According to CBS Texas, surveillance captured a Romanian national, Ionu Aurel Iova, installing a nearly invisible metal plate over an ATM cash slot, blocking cash even as ATM noises falsely suggested cash was dispensed. The perpetrator returned to reclaim the trapped notes and reset the device for the next victim — a cycle that eroded customer trust and increased strain on branch operations. 

Victims often blame the bank for what feels like a malfunction, not a scam, which amplifies calls to customer service, drives up claims, and escalates the risk of social media blowback, implications noted by Moneywise. 

The emotional toll on branch managers can be deep and lasting, shifting “Not in my bank!” to “Why my bank?” overnight. 

Cash trapping is one aspect of a broader, escalating global ATM scams. Others, like skimming and jackpotting, routinely yield millions in losses and attract regulatory attention. For example, BankersHub highlights cash trapping as part of a surge in ATM-based scams, while jackpotting hit banks hard in Edwardsville, Illinois, in 2025. Abroad, The Sun exposed coordinated cash-trapping rings in Ireland that netted €90,000 in a single week. 

CoinLaw and fintech firm FTSI tracked U.S. incidents of ATM fraud, noting: 

• 600 percent increase worldwide, producing $2.4 billion in losses in 2024 
• 15 percent rise in U.S. instances in 2025 
• Older ATM vulnerability 
• 10 percent customer churn among affected institutions 

The hardware involved is extremely deceptive — metal or plastic overlays designed to mimic ATM components, attached using double-sided tape and removable only with bespoke tools, as described by the U.K. newspaper The Sun. Criminals deploy these devices outside video surveillance zones or during off-peak hours, making rapid intervention a matter of training and vigilance. 

Device sophistication has risen, bypassing even seasoned investigators. ATM security vendors (such as ATMeye.IQ) and international law enforcement continue to warn operators about hard-to-detect device innovation. Security leaders must establish regularly scheduled physical inspections and frequent ATM audits, prevention tactics noted by the ABA. 

Security teams must lead with transparency and a layered, institution-centric approach, informed by ongoing threat intelligence. Recommended actions include: 

• Branch, vendor, and third-party staff training: Every employee and partner should be able to recognize device overlays or tampering—no branch or remote ATM is immune, warns the ABA. 
• Technology upgrades: In addition to its advice about training, the ABA also champions the importance of technology upgrades. It advocates for implementing tamper-evident seals, reengineering cash dispensers to prevent overlays, and considering advanced ATM security automation for proactive detection.  
• Rapid-response protocols: The ABA further advocates for a “failed-to-dispense team” that reviews logs and surveillance within 24 hours of a report of hijacked withdrawals, using clear escalation steps. 
• Customer education: BOK Financial Corporation advises that bankers should educate customers to report discrepancies immediately and stay at the ATM until an issue is resolved. Institutions should remind customers that rapid notification can mean the difference between loss and recovery. 
• Customer restitution: Ebrax ATM Security (Wilmington, Del.) notes that prompt provisional credit for affected accounts is not only a trust-builder but increasingly demanded by regulators and battered customers alike. 

Effective cash trapping mitigation requires coordination across operations, legal, reputation management, and branch teams. Even a single incident can trigger significant erosion of trust, negative coverage, and potential regulatory scrutiny. These outcomes can be far costlier than any individual reimbursement claim, warns the ABA.  

Routine collaboration with industry groups, incorporation of ABA best practices, and partnerships with consultants for process audits and upgrade recommendations are increasingly seen as baseline measures within the industry. 

Cash trapping is a reputational and operational threat that grows more sophisticated each year. Banks that move beyond the “Not in my bank!” mindset in favor of proactive, transparent engagement — internally and externally — will not only be more secure, but also more respected. Customers and regulators can spot the difference between denial and leadership. 

Banks that act decisively today protect their customers, their reputations, and their futures. 

Ultimately, confronting cash trapping head-on is not only a matter of protecting customer assets but a core fiduciary responsibility — and the foundation upon which a bank’s reputation and long-term viability depend.