Thefts could spur cash-free banking

November 13, 1992|By David Conn | David Conn,Staff Writer

The theft last weekend of money from a bank's night depository has raised a number of issues in the minds of retailers who casually drop their cash in those boxes every night, not least of which is, "Whose money is it?"

The "Fishhook Affair," as the annals of banking history might record it, occurred Sunday night, when someone somehow opened a locked night depository at a Maryland National Bank in Lutherville.

By dropping in a fish hook and fishing line, the unknown party reeled in a whopper: 17 deposit bags carrying $65,000, mostly in checks,some in cash. Although fish hooks and fishing line were found in the depositories of several other banks' branches, including First National Bank of Maryland and Mercantile-Safe Deposit & Trust Co., the would-be thieves left with nothing from those locations but tales of the ones that got away.

The theft, while unlikely to become a widespread occurrence,struck a nerve with some merchants who depend on the boxes to rid themselves of the risk of carrying cash overnight.

And some banking consultants suggest that incidents like this one, as well as the increasing hazards of nighttime withdrawals from automated teller machines, might further spur America's transition toward an electronic nation.

"The question is, will this help speed the 'less-cash society,' and the answer is yes," said Ed Furash of Furash & Co., a Washington bank consulting firm.

The theft last weekend has left police, Maryland National officials and the boxes' makers' scratching their heads about a deposit system that was thought to be foolproof.

"We can't figure it out," said Maryland National Bank spokesman Daniel G. Finney. "Our security guys have commented that they don't know how it could be done."

Although Mr. Finney chose to downplay the chance of a replay, the theft has made some area retailers concerned about their money.

That's because even though the money was left with the banks' depositories, it still belongs to the merchant until the bank opens the machine in the morning, counts the funds and issues a receipt.

"So it's an unmade deposit until we collect it out of the box and verify it," Mr. Finney said.

Marge Chambers, manager of Second Story Books on Greenmount Avenue, said she has given up on night depositories, and not just because of the fear of being mugged on the way to the box.

"I had put some money in [one time], and it just never got credited to our account," she said.

The manager of a downtown restaurant, who spoke on the condition of anonymity, said the boxes provided an artificial sense of security. "When you lock that door, you feel great, your responsibility ends there," he said. "But actually it doesn't. That's pretty scary.

"The only alternative would be to hold the money overnight," he ** said, "but the police and insurance companies tell you, don't keep any money on hand."

Thefts of cash might spur the development of alternatives to paper money, suggested Mr. Furash, the bank consultant.

One example, he said, is a plastic card with a computer chip that keeps track of the amount of money the card has left on it, like the paper cards used in Washington's Metro system. Such a card would include a personal identification number, like a bank ATM card, he explained.

The fishhook affair could also "encourage merchants to look again at so-called 'point of sale debit transactions,' " he said, referring to the use of ATM cards at the cash register. "And I think it should."

In fact, more retailers are moving away from paper money every day.

Giant Food, for instance, has decided to accept credit cards at its cash registers. And Thomas Saquella, director of the Maryland Retail Merchants Association, said his group has launched a pilot program whereby five retailers are trying out debit machines in their stores.

"There's been resistance on the part of retailers," Mr. Saquella said, largely because they haven't been convinced it pays to invest the $1,000 or so in the machines.

But with incidents like last weekend's, the "dream world" of a paperless society might be moving closer than ever, he said.

"They'd much rather not handle cash," Mr. Saquella noted. "There's no question about it."

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