On the latest episode of Extremes: a VICE podcast, the program delves into the story of Dan Saunders, an Australian man who hacked an ATM and became an accidental millionaire. For five months, the 29-year-old spent close to $1.6 million of the bank’s funds, chartering private jets, throwing lavish parties, and even paying off his friends’ university fees until the authorities began to catch on.
His riches came about when Saunders was bar-hopping in his hometown of Wangaratta. Upon making an ATM stop to get some cash, Saunders discovered that the ATM was not functioning correctly.
“I transferred $200 from my credit account to my savings, and it said “transaction canceled” and spat the card out. I thought that was super odd, so I decided to try and get $200 out of my savings account just to see what would happen. It gave me the money, so I went back to the bar and continued drinking.” However, he could not shake the feeling that something fishy had taken place with his account. “After I left the bar, I was walking home past the same ATM. I’d been thinking about how odd the whole thing was, so I put the card in again and started playing around. I transferred another $200 and got the money out. Then $500, then $600, just to see what would happen. I think it was a combination of being tipsy and bored, but I just pushed the envelope and tried again and again. It was like a magic trick.”
The next day, he realized that this loophole in the ATM system was not a figment of his intoxication, but a loophole that he could easily finesse.
“I called to get a balance on my savings account, which was now $2,000 in debt. I figured there was a lag between what the ATM gave me and what my bank balance was, which meant that whatever I spent, I could cover it by doing a simple transfer every night between my credit account and my savings. I could “create” the money by doing a transfer between 1 and 3 in the morning, which is when I realized ATMs go offline.”
Once he figured out exactly what was happening, he knew that he had to stay one day ahead of the banking system.
“So on the first day, I spent $2,000, but on the second day, I transferred $4,000 to make sure my balance didn’t stay negative. The transfer at night would go through, then reverse one day later. But if you stayed ahead of that reversal by doing another one, you could trick the system into thinking you had millions.”
In 2011, Saunders began to experience guilt and anxiety as a result of his greed, which drove him to see a psychiatrist. He claims he contacted the bank in June and July of that year.
However, he was told that the matter was now out of their hands and being overseen by police. Despite this, for two years, authorities did not make contact with him. Instead, Saunders sought out investigators in order to clear his conscience.
“So in an effort to get things resolved, I went to the Herald Sun and then several other media companies, including a video interview on A Current Affair. Basically, it took three print stories and an appearance on national TV to be taken seriously.”
Ultimately, Saunders was sentenced to one year in prison and 18-months of community service.