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. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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