ILNews

ATM fee disclosure rules and related litigation

Jenny Montgomery
April 25, 2012
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In 2011, nine lawsuits were filed in the United States District Court, Southern District of Indiana, in which plaintiffs sued owners or operators of ATMs for failing to post a sign advising users of usage fees. Similar suits have been filed around the country, and groups that represent ATM owners’ interests are calling for a change to federal law to stop further litigation.

The American Bankers Association, the National Association of Convenience Stores and five other national organizations wrote a letter in February to Washington, D.C., lawmakers, saying the lawsuits threaten the economic viability of ATM operators.

In their letter to members of the Senate Committee on Banking, Housing and Urban Affairs and members of the House Committee on Financial Services, the groups advocated eliminating an ATM fee disclosure requirement that they say is no longer necessary due to advances in technology. Under the Electronic Fund Transfer Act and its implementing rule, Regulation E (12 CFR 205.16), all ATMs must have two notices of a usage fee – one on-screen, and one attached to or near the ATM.

Financial industry leaders say that the dual notice may have been necessary before on-screen notices were as easy to read as they are today, but one inherent problem with the requirement for an exterior sign is that stickers or signs can be removed or defaced easily, putting the ATM owner at risk of a lawsuit.

According to Regulation E, when an ATM lacks a sign or placard advising of additional fees, successful class-action plaintiffs are entitled to recover the lesser of $500,000 or one percent of the net worth of the ATM operator, plus attorney fees and costs.

Derek Edwards, of the Tennessee firm Waller Lansden Dortch & Davis, has defended clients in more than 100 ATM fee disclosure suits in courts around the country, including a case in Indiana, Lear v. ATM Access, No. 1:2011-CV-01321. He said that many ATM fee disclosure cases are filed against small ATM operators whose machines are housed inside larger businesses. Those cases seem to settle early, with no escalation to class-action status, he said.

Edwards estimates he spends at least half of each day working on defending against fee disclosure lawsuits, but estimating the number of similar cases nationwide is difficult, as many cases are coded improperly when entered in the PACER court records system. Congress may therefore be unaware of how widespread these lawsuits have become, he said.

On April 17, 2012, two members of the House Committee on Financial Services – U.S. Reps. Blaine Luetkemeyer, R-Mo., and David Scott, D-Ga., – filed H.R. 4367, which would eliminate the dual notice requirement required by EFTA. No further action had occurred on that bill by IL deadline.

An unrelated case that the U.S. Supreme Court is currently considering could affect the ability to recover damages under EFTA. The case – First American Financial Corp., Successor in Interest to The First American Corp., et al., Petitioners v. Denise P. Edwards – presents a question of whether a plaintiff may bring a class-action complaint against a defendant when the plaintiff has not suffered any “injury of fact,” as defined by Article 3, Section 2 of the U.S. Constitution. Some ATM fee disclosure cases have been dismissed for failure to state a claim on which relief can be granted; while others have been successful in earning class-action status.•

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  1. I will continue to pray that God keeps giving you the strength and courage to keep fighting for what is right and just so you are aware, you are an inspiration to those that are feeling weak and helpless as they are trying to figure out why evil keeps winning. God Bless.....

  2. Some are above the law in Indiana. Some lined up with Lodges have controlled power in the state since the 1920s when the Klan ruled Indiana. Consider the comments at this post and note the international h.q. in Indianapolis. http://www.theindianalawyer.com/human-trafficking-rising-in-indiana/PARAMS/article/42468. Brave journalists need to take this child torturing, above the law and antimarriage cult on just like The Globe courageously took on Cardinal Law. Are there any brave Hoosier journalists?

  3. I am nearing 66 years old..... I have no interest in contacting anyone. All I need to have is a nationality....a REAL Birthday...... the place U was born...... my soul will never be at peace. I have lived my life without identity.... if anyone can help me please contact me.

  4. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  5. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

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