People withdrawing money from the Gerald St machine were caught by surprise when their cards disappeared.
The problem was exacerbated if it happened after business hours, meaning people could not get a card reissued at the nearest Westpac branch in Rolleston.
Westpac says the machine will be replaced in the next "12 to 18 months".
"It’s just so frustrating,” a woman told Selwyn Times.
"I was getting some cash, and my card just went.
"It was a double whammy because I didn’t get the money I was after and I couldn’t then pay by eftpos because my card was gone, and I couldn’t get another one because it was after hours."
Another customer said he was lucky not to lose his card.
"As I went up to the ATM, a car horn sounded.
"At first I didn’t take any notice but it kept going so I looked around and a woman in a car parked by the ATM was tooting and waving at me.
"I went over and she said ‘don’t use the machine, it just swallowed my card’."
In December, Selwyn Times reported ongoing issues with the ATM, after assurances from Westpac the problems would be fixed.
The machine was regularly out of service and had been taking cards but not giving out cash.
Said a Westpac spokesperson of the latest issue: "We’re aware of a very small number of cards being captured by our Lincoln ATM over the past week.
"We have put in place a fix to address the root cause and will continue to monitor the ATM to ensure the issue is fully resolved.
"The ATM contains up-to-date parts and technology and is due to be replaced by a new machine in the next 12 to 18 months.
"It’s rare for a card to be captured by an ATM. We appreciate it can be frustrating when this happens and encourage customers to contact us immediately."
