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Kidnap/Ransom and Extortion: Are You Ready?

By: Bill Poquette

At the annual convention of the Nebraska Independent Community Bankers last fall, David Lattin of St. Paul Travelers suggested to his audience that it is prudent, in this dangerous world, to be prepared for extortion and kidnap/ransom threats. Such incidents are not necessarily limited to the physical confines of bank itself, according to Lattin, who is director, industry practices, for the big St. Paul-based insurer, but can involve home invasions or attacks while traveling. In a recent interview with BankNews, Lattin expanded on his Nebraska remarks, offering advice on both preventing these crimes and dealing with them as they occur. Also present for the interview was George Biancardi, senior vice president and chief underwriting officer for the company’s financial institutions group.

In the community bank environment, Lattin explains, the two types of incidents that occur most frequently are extortion and home invasion. Extortion means someone approaches the bank or an employee of the bank and poses a demand against a threat. For example: “Unless you give me xyz money we will harm someone or we will do something to your site or we will do something to your computer system.”

A typical home invasion occurs when a branch manager is targeted at home by criminals who are familiar with his position. While they are holding his family they will say, “Go to the bank when the vault opens at 8 a.m. and bring back a bag of money. Then your family will be freed.”

Bank officers and staff often are exposed to another type of kidnap/ransom threat when traveling. In addition to the common crimes — hotel room theft or airport-related theft — more “interesting” types of incidents are starting to occur, Lattin says. These are “express kidnappings,” which are becoming more common in larger cities, particularly along United States borders.

Criminals identify people coming out of hotels, crossing over to restaurants. They look like business travelers, they don’t look like locals. They’re grabbed by criminals, oftentimes in collusion with bad taxi drivers, and forced to give up the pin numbers of their ATM cards. They are held against their will until an ATM transaction is made before midnight, Lattin points out. Then the criminals may wait until after midnight and get into the next day when they can get another dose of cash with the ATM card.

As frightening as the specter of extortion, bomb threats, home invasions and kidnap/ransom plots are, bankers should take some comfort from the availability of resources to prevent these crimes or deal with them as they occur, Lattin suggests.

St. Paul Travelers has a kidnap/ransom product that has coverages beyond those incorporated in common fidelity bonds, according to Biancardi. The fidelity bond covers third parties coming on the premises, robbery, forgeries, and those types of thefts, he points out, but it is not specific as to crimes like kidnap/ransom and home invasions. Although some relevant endorsements are available, they are not as comprehensive as the specialized product.

With the kidnap/ransom product St. Paul Travelers offers, every insured receives a booklet produced by Kroll, Inc., one of the world’s leading independent risk consulting groups. Kroll’s booklet, When Seconds Count, provides several things, Lattin says.

“It provides what I like to call pre-incident services that will prevent something from happening in the first place by raising awareness and outlining procedures. The booklet also provides initial actions to take in the event of an extortion demand or abduction incident, who to call, and what to say on the phone as the first minutes and hours unfold in an incident like this. Then it gives a 24-hour 800 number for reaching out to get an informed advisor for help in addition to, of course, local law enforcement.”

There is a whole range of issues to be dealt with, Lattin says. “We tend to think that when something like this occurs, we’ll just pick up the phone, dial 911 and somebody carrying a badge is going to manage the whole thing. But there are financial issues, there are human resource issues, and many other issues that still have to be managed.”

Having a knowledgeable advisor to put the bank’s employees and management through the hoops of a horrific incident like this can really help, in Lattin’s opinion. The advisor has been through it many times, while usually the bank management has not.

St. Paul Travelers’ relationship with London-based Kroll is strictly a retained agreement, explains Lattin, “where we have confidence in their ability to provide specialist advisors. As a marketing add-on, we retain them to provide that service for our kidnap/ransom product.”

Lattin emphasizes that when Kroll advisors come to an insured event, they are working for the insured. “They’re independent; they’re only there to work for the insured. We have nothing to do with it during the entire time that the incident is occurring. The St. Paul Travelers product is an indemnity policy or a reimbursement policy, which means that it’s up to the insured and the specialist advisors and law enforcement to manage the problem. Once it’s over, they’ll bring a claim over to us.”

On the prevention side, Lattin says, there is a lot of advice When Seconds Count. “Any small community bank can use the contents to say, ‘Look, here are some professional advisors that have given us a written product, we’re going to sculpt this right into our procedures for managing one of these things. This is what we should be saying to these kinds of people should they call in.’”

The bank can actually disseminate parts or all of the publication to its managers so people know exactly what they should say and do if one of these events transpires, adds Lattin. “It actually gives them exactly the kind of sequence and what they should be saying to bad guys should they call in.”

Asked whether kidnap/ransom or extortion scenes can be rehearsed, Lattin agrees they can. “The average community bank, however, will find that this kind of rehearsal training may cost more than they wish to spend,” he explains. “The booklet not only addresses the initial actions but it speaks to the methodology. If a bank had an in-house training session and spent 45 minutes to an hour just getting people familiar with the contents of the booklet, the methodology could be addressed that would suggest not only what to do in the initial stages of an evolving event but, more importantly, why they would be doing it. And they would then understand what the end game was.”

Staying in control of kidnap/ransom and extortion situations is essential, Lattin emphasizes. “Actually it surprises insureds going through one of these things. Again, they tend to think that you pick up the phone, dial 911 and then all control is handed over to another entity.

“But there are issues that the authorities will look to the community bank to address,” Lattin continues. “For example, there can be financial-related issues, such as coming up with the means to perhaps do a drop with money. Exactly how is the family going to be managed? What are you going to say to the outside world in terms of public relations statements?”

When a community bank decides to stay in control by insisting that it needs to make the tough decisions rather than leave them to the authorities or other entities, the bank’s objectives will be easier to achieve, Lattin believes. “As you might imagine,” he adds, “the ultimate objective any community bank would have in one of these types of incidents would be the safety of its employees.

“But in some instances, the primary objective of law enforcement may be the arrest of the perpetrator, rather than the safe return of a bank employee. Other people will try to take control. When the media gets wind of this kind of crime they’re going to try to affect it through their reporting — even if inadvertently. You can go a long way in either giving up control to the media or retaining control in the way that you speak publicly.”

Besides When Seconds Count, Lattin cites several resources available on the Internet with helpful information about dealing with assorted threats to the bank or its people. “There is a wonderful website,, that actually provides ways to handle incidents relating to a bomb-extortion or a bomb-threat procedure. It provides PDF files that bank employees and management can download that detail procedures for handling anything that suggests a bomb hoax call or bomb threat or extortion with a threat to bomb.” Information pertaining to bomb threats is also available at

“Another helpful website is a travel security-oriented site within the State Department,,” Lattin continues. “We tend to think about traveling abroad, but it also gives great advice for anybody who’s traveling, period. If someone from the Midwest who has never been to the big city is traveling to New York City, the principles in travel security are still valid and applicable.”

Additionally, by going to, the prospective traveler can be linked to helpful reports available on “For $14.95,” says Lattin, “you can get country- and city-specific reports. That’s small money to pay for the kind of information you’re going to get from that.

“One of our insureds — a financial institution — said some of its people were going down to a conference in Tijuana. I gave them the link and they came back and said this is absolutely fantastic stuff because it told them about the crime situation in Tijuana, it told them which hotels to avoid; what clubs and restaurants to avoid; which ones were recommended in terms of safety and security; and where they could find a doctor who could practice to North American standards and could speak English.”

Mexico, by the way, has the highest rate of incidents such as express kidnapping, according to Lattin. “But if you go further south into Latin America and South America, the large cities are where it’s really happening.”

Instead of hailing a cab on the street in these situations, a safer option is to make arrangements in the hotel, so the cab is one the hotel knows is reliable.

Bill Poquette is editor of BankNews magazine.

© Copyright BankNews, April 2005