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MINNEAPOLIS (CN) - An ATM company claims that someone "with considerable knowledge of ATMs" drained a machine of $38,425 after an armored car service wrote the machine's password "in permanent marker" on the inside of an ATM's front panel.

Bancard Systems sued U.S. Bank National Association dba Elan Financial Services, and Pendum, the Denver-based armored car courier.

Elan stocked Bancard's ATMs with cash, and Pendum provided the armored cars, according to the complaint in Hennepin County Court.

Sometime in September and October 2010, "an unknown individual with considerable knowledge of ATMs and their administrative systems gained unauthorized access to one of Bancard's ATMs," the complaint states.

"The unknown individual opened the front panel and utilized a password that was written on the machine in permanent marker by Pendum's representatives to access the administrative software menu. ...

"Once the administrative menu was accessed, the unknown individual altered the currency denomination, made multiple fraudulent withdrawals from the ATM from September 2010 through October 2010, and then reset the denomination to its original setting.

"All told, this unknown individual absconded with $38,425 of Elan's currency from Bancard's ATM."

Bancard says Elan and Pendum were obligated to tell it within 72 hours after finding such a "discrepancy," but neither of them did it.

It claims they discovered the ruse by Sept. 29, but did not inform Bancard until Nov. 22. Bancard adds that both defendants investigated, "and each separately and independently determined that the loss was caused by Pendum's negligence."

One problem, Bancard says - aside from writing the password on the machine - is that Pendum uses "generic passwords" for 90 percent of its machines, instead of using different passwords for each one.

Bancard says that despite the investigations, Pendum had the brass to deny its claim for loss, "without offering any factual support for their denial of the claim."

Bancard adds that Elan then sent it a letter "rubber-stamping Pendum's preposterous denial, and demanding that Bancard pay for the loss despite the fact that Elan and Bancard determined that Pendum caused the loss."

Bancard demands costs and damages for breach of contract, breach of faith and negligence. It is represented by Cory Eilers of Bloomington, Minn.

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