Coming to Panama? Beware the ATM

An interesting story about ATMs in Panama appeared in The Panama News, Panama’s online English newspaper . . .

Beware of ATM rip-offs in Panama
by William F. Laurance, PhD

Call me naïve, if you like.

I am about to tell you a personal horror story of a banking rip-off in Panama — one that can affect anyone, especially visitors and foreign residents.

I used to trust ATM machines. But I’ve learned the hard way — at a cost of thousands of dollars — that you simply can’t do so.

If you put 50 cents into a coffee machine, and it’s out of coffee, you’ll usually get your 50 cents back. But if you put your credit or debit card into an ATM, and it’s out of cash, or has any other transaction problem, guess what?

The ATM takes your hard-earned money — it debits your account — even if it hasn’t given you one cent.

And it doesn’t give it back.

A detective story

I stumbled onto this the hard way. Last month, my wife received an “Out of cash” message at a Banistmo ATM in Panama City, as she was trying to withdraw $200 in cash from our credit union in the United States.

Just to be safe, she checked our US account and discovered that $201.60 had been debited from our account — $200 plus a $1.60 banking fee.

My wife went to the Banistmo Bank in Albrook and explained what happened. Not our problem, they said — even though it was their bank that took our money. Talk to your credit union.

Alarmed, my wife filed a detailed written claim with our credit union. Eventually, they reimbursed our account.

Then it happened again.

Just a week ago I was trying to withdraw $500 from a Banco General ATM at the Holiday Inn in Clayton. I got an odd message — “This machine only distributes funds in denominations of $20” — and I didn’t receive a penny.

My suspicions were raised when I immediately tried two other ATMs in Panama City and both said I’d already received my maximum daily withdrawal. So I went home and checked my US account online. I was appalled to see $504 had been withdrawn the $500 I’d requested plus a $4 banking fee.

Instead of getting mad, I wanted to get even.

I returned to the Holiday Inn where the ATM was located, and made a big scene at the reception desk. I politely demanded to speak to the hotel boss, and requested that the National Police be immediately summoned. This was, I feared, an example of white-collar crime in action.

After dealing with a series of lower hotel functionaries, all of whom tried to dissuade me, I finally got to see the big boss.

But they all refused to call the police. Repeatedly. I formally requested the police seven times.

Panic began to set in at the hotel. Before long a woman at Banco General phoned me at the reception desk. She was very worried about the police. Please, she pleaded, they would do whatever they could to help me, but police involvement was unnecessary.

I eventually did get the National Police to come, but only by insisting the bank boss give me a written statement explaining why he had refused to summon the police.

The staff nearly fainted when two heavily-armed police officers, clad in army fatigues, arrived at the hotel.

The National Police were very helpful. They listened carefully to my story, and then personally escorted me to police headquarters where I filed a formal written complaint.

I used the police complaint, along with a detailed written explanation, to convince my credit union to reimburse me the $504 that Banco General had debited.

But here is the truly shocking part. Just as I was talking to my credit union on the phone, my wife rang: It had happened yet again.

Getting scared now

Panicked about ATMs, my wife had gone to our bank—the HSBC bank in Ancon, where we have a savings account and home loan—and tried to use the ATM there to withdraw $500.

She got an “Out of cash” message—and not a dime of cash. Checking our US account online, she saw we’d again been debited $504.

In the space of four weeks, over $1200 had been debited to our account. And not once had any bank said anything about it, or notified us there was a problem, or credited our account for the false transactions.

Because we bank with HSBC, we demanded an explanation. In a nutshell, we were told, all banks have problems with their ATMs at times, debiting accounts when they shouldn’t. In these cases, one of two things will happen.

If you are a customer of the bank whose ATM you are using, your funds will be returned automatically, they claim.

But if you are not customer — if you happen to bank elsewhere, as is often the case — you are out of luck. The only way to get your money back is to file a formal appeal with your home bank. And hope they believe you.

What I’ve learned

In speaking to six representatives of four different banks in Panama and the United States, I’ve learned some important things.

First, all banks have problems with their ATMs at times. In Panama, however, the frequency of problems seems to be high — so the chances of rip-offs are high.

Second, when a problem happens, it is the responsibility of the customer to fix it. The bank will not notify you if it has wrongly debited your account—it just keeps your money. Astonishingly, despite all the electronic wizardry in an ATM, the banks claim they cannot be sure who actually receives cash and who does not.

Third, be very careful when using ATMs in Panama, especially if you are a foreigner or are using an ATM to withdraw funds from a different bank. Write down every transaction — the date, time, ATM location, and amount of cash you requested.

Fourth, check your account online regularly. Compare the cash you’ve received against the debits to your account. If the numbers don’t add up, contact your home bank immediately, and file a claim for reimbursement.

And lastly, if you discover a problem — and I’ll bet you will — I recommend getting the National Police involved. It has a way of capturing the attention of banking officials everywhere.

If more of the little guys like us speak up, perhaps the banks and government banking officials in Panama might actually do something about this. Feel free to contact me ( if you’ve had a similarly alarming experience with Panama’s banks.

13 thoughts on “Coming to Panama? Beware the ATM

  1. Great article, i own a hostel in david panama that caters to an international backpackers crowd and we and our guests have all had the same story till we discourage folks from using the machines at all, panama is a great country but they need to fix the atm situation for the tourists!

    bambu hostel
    david panama
    a backpackers resort!

  2. the same happened to me with [a bank on], via espania in ciudad. the atm did not give me any money and withdrew 500 bucks from my account.
    the bank was closed. i went to my ambassador who was very helpful in escorting me to the bank manager the next day. they admitted the mistake, i think they did only because my ambassador was there. i had to fill out forms for my bank and got the money back from my bank.

    i have travelled more than 90 countries all over the world. it has never happend anywhere -only in panama.

    i believe it is an organised scam, organised by the banks directly. have you noticed: recently they set up another scam charging 3 bucks for every atm transaction-every bank in panama.

    i will not go to panama any more.

  3. What a frightening event to happen. This definitely appears to be a scam. I wouldn’t trust ATMs in Panama again. Best to withdraw funds the old fashioned way. I also agree with Fred, the above commentator, that this does not happen in any other country in the world. It was a good idea to call up the National Police. ATMs are not a “new technology”. Also, your banking receipt should show that “no funds were dispensed” or something like that.

  4. This happened to me on Feb 17, 2010 using a Multibank ATM located in the venetto Casino. It gave me $90.00 in fives and charged me 203.00 The Casino, hotel or touristo police would not help. I went to the Multi bank office a few blocks away on Via espana and they would not talk with me about it. I am now waiting to see if Bank of America is going to credit me my $110.00 . The worst part is Multibank gets to keep its $3 fee for causing a problem. If you have any problem in panama no will give a rats ass or try to help you. Please understand this upfront

  5. Thanks to William and the other contributors for your comments. I just returned from Boquete and tried to use my ATM in EVERY bank(about 10mof them) in the town. Even though my credit union from Canada has PLUS and INTERACT logos I could not get a cent from the ATMs, nor was anything charged to my account.

    Eventually I had to use my VISA card for cash and pay the interest.

    Can anyone shed some light on this problem?


  6. A coupld of weeks ago we tried to take $500 out from the Multibank ATM in Alto Boquete. It said it was unable to provide that service at the time. We then tried the HSBC which said we had reached our daily limit. When we got home and checked the account online Multibank had taken the money. The bank back home said they would release the funds but often the foreign bank would then resubmit the claim. This has now happened so basically Multibank has stolen $500 from us and we now have to go through the lengthy process of trying to claim it back. Even though I know it will make no difference I am going into the Mutibank branch to see the manager tomorrow and am going to threaten with the police and let them know in no uncertain terms that it is NOT okay to steal people’s hard earned money. This kind of behaviour makes me sick to the stomach.

  7. hi, it happened to my wife yesterday. She put her card in, attempted to get $500 and nothing but checked online 30 min later & to see account debited $503. I called the bank. They said they will run an investigation. The atm was located apart from a bank but in an extremely busy area. People ahead of me probably getting smaller transactions were successful though. Wife said $500 is not an amount to get here…we did get $400….but what next about the $503?

  8. Sorry Gringos! I am Dutch and live in St. Lucia a third world country. First of all I would like to mention that in the USA more banks went bankrupt since 2008 than anywhere else in the entire world. If you are banking in the USA with a credit union that has relatively small
    international business it might be that this bank has at times not sufficient funds for international payments central world settlement system. I am going to live towards the end of 2013 in Panama. The best thing one can do is to let your bank in the USA send wire transfers to
    Panama. This is cheaper and very fast. Open a simple savings account in Panama and a local visa debit card. No cheque book and all that nonsense. My pensions from The Netherlands come directly by wire transfer from the insurance companies and the Dutch social security into my account in St. Lucia. In The Netherlands we have no cheque books,
    only ATM cards, Debit and Credit Cards and online banking. Even with your local Dutch ATM card you can pay in all shops, restaurants etc. The fee they charge you is only Euro 0.50. So do not blame a foreign country. The USA is technically bankrupt. One cannot trust
    the USA government and bankers, they all lie and are cheating using the privately owned FED to print money out of thin air. Same happens in Europe. Genreal De Gaule the president of France did not trust the Americans during the Vietnam war as the USA ran out of Dollars that we in those days backed by gold. He dumped all Dollars that France had and claimed gold. Mr. Nixon, the big crook, abolished the gold standard in 1971 and the paper money printing started to pay of the war debt. The biggest scam in the world is
    the fractional banking system and a central bank creating money out of thin air and charging interest. Look on Youtube and go to Zeitgeist. It will take about 2 hours, but
    it explains everything. After watching it, you might feel miserable, but you will be updated.
    Only gold and silver are real money for over 6,000 years. Never keep your gold in the USA, as the government can confiscate it like in the early 30’s of the past cenutury.

    Robert Berding

  9. It is happening all over again in Panama RIGHT NOW! October 22-23-24, 2013. The banking system nor it’s government regulators have not learned ANYTHING.
    ATM says you have a problem with your account and to contact your USA bank. “Thank you for your business”. You check your account (from the same machine) and find that your account has been debited! You get no money!
    You contact the bank that sponsored the machine and they parrot the same message:
    “There must be something wrong with your card or your account. It is possible that the machine is not accustomed to dispensing the large amount that you asked for ($200.00). We can do nothing. We cannot give you cash from your debit card. You must contact your bank in the US to resolve the issue. Good by!” “Click” (if by phone) or “Please leave, NOW” if you are at the bank.

  10. Here it is, five years since this blog article was written, and the Panama ATM “nightmare” is alive and still kicking a$$. I have not been so robbed yet, but I do have many cruising friends who have been. So, in being regularly paranoid I did a little digging. It seems that many of the early ATM machines were originally produced with an easily hacked interface, where as the hacker can empty the machine of its treasure in under a few minutes. He (or she) does this with software, which is probably why everyone reports different error messages. I am assuming the banks don’t want to re-imburse anyone because they have already taken a large hit and your money helps defray the loss. I think most of the vulnerable ATMs were replaced in the states, but I don’t think the Panamanian banks are ready to start changing out machines on their dime… The losses may be much smaller that the cost of new machines?

    I started trying to find info so I could continue avoiding the losses and the hassles, so I figure (maybe wrongly) that the ATM’s that are inside major businesses, like big box stores, would be safer, as it might be harder to unplug the machine and plug in their smart phone in such high profile places and they are locked up at night. Has anyone been robbed at those places?


  11. In all of those places, including one attached to, and just outside Caja de Arrohos WHILE THE BRANCH MANAGER WATCHED!!
    Sistima Clave is run by Banco National de Panama, the government owned bank as I understand it.l So if you really want to pursue a problem in the “courts” in Panama, you may end up with the Government of Panama as your opponent.
    Good luck with that!

  12. In principle it is simple. The ATM controlers who open te machines and fill it up have to make a statement of the exact cash balance stating time and day. electronic control will show what has been charged and to whom. Consequently the scam can be with the ATM people who open the machines or manipulate them in some way.

  13. Amazing to read this! I just returned from a visit to PC and the interior. My first trip and time using an ATM was a pleasant surprise as I was out of money and headed home, worked fine. BUT , this trip was enough to change that real fast. I had checked my statements online just prior to leaving and at midnight there were 2 duplicate charges, one on 11:59, and again 12:01. 2 different dates, at the 99 in Chitre and another from a withdraw at the 99 in Tocumen. My bank straightened it right out and it went uncontested. Hmmmm… Now I know.

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