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 I was appalled to see $504 had been withdrawn the $500 I’d requested plus a $4 banking fee.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 (firstname.lastname@example.org) if you’ve had a similarly alarming experience with Panama’s banks.