ILNews

ATM fee disclosure rules and related litigation

Jenny Montgomery
April 25, 2012
Back to TopCommentsE-mailPrintBookmark and Share

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.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. YES I WENT THROUGH THIS BEFORE IN A DIFFERENT SITUATION WITH MY YOUNGEST SON PEOPLE NEED TO LEAVE US ALONE WITH DCS IF WE ARE NOT HURTING OR NEGLECT OUR CHILDREN WHY ARE THEY EVEN CALLED OUT AND THE PEOPLE MAKING FALSE REPORTS NEED TO GO TO JAIL AND HAVE A CLASS D FELONY ON THERE RECORD TO SEE HOW IT FEELS. I WENT THREW ALOT WHEN HE WAS TAKEN WHAT ELSE DOES THESE SCHOOL WANT ME TO SERVE 25 YEARS TO LIFE ON LIES THERE TELLING OR EVEN LE SAME THING LIED TO THE COUNTY PROSECUTOR JUST SO I WOULD GET ARRESTED AND GET TIME HE THOUGHT AND IT TURNED OUT I DID WHAT I HAD TO DO NOT PROUD OF WHAT HAPPEN AND SHOULD KNOW ABOUT SEEKING MEDICAL ATTENTION FOR MY CHILD I AM DISABLED AND SICK OF GETTING TREATED BADLY HOW WOULD THEY LIKE IT IF I CALLED APS ON THEM FOR A CHANGE THEN THEY CAN COME AND ARREST THEM RIGHT OUT OF THE SCHOOL. NOW WE ARE HOMELESS AND THE CHILDREN ARE STAYING WITH A RELATIVE AND GUARDIAN AND THE SCHOOL WON'T LET THEM GO TO SCHOOL THERE BUT WANT THEM TO GO TO SCHOOL WHERE BULLYING IS ALLOWED REAL SMART THINKING ON A SCHOOL STAFF.

  2. Family court judges never fail to surprise me with their irrational thinking. First of all any man who abuses his wife is not fit to be a parent. A man who can't control his anger should not be allowed around his child unsupervised period. Just because he's never been convicted of abusing his child doesn't mean he won't and maybe he hasn't but a man that has such poor judgement and control is not fit to parent without oversight - only a moron would think otherwise. Secondly, why should the mother have to pay? He's the one who made the poor decisions to abuse and he should be the one to pay the price - monetarily and otherwise. Yes it's sad that the little girl may be deprived of her father, but really what kind of father is he - the one that abuses her mother the one that can't even step up and do what's necessary on his own instead the abused mother is to pay for him???? What is this Judge thinking? Another example of how this world rewards bad behavior and punishes those who do right. Way to go Judge - NOT.

  3. Right on. Legalize it. We can take billions away from the drug cartels and help reduce violence in central America and more unwanted illegal immigration all in one fell swoop. cut taxes on the savings from needless incarcerations. On and stop eroding our fourth amendment freedom or whatever's left of it.

  4. "...a switch from crop production to hog production "does not constitute a significant change."??? REALLY?!?! Any judge that cannot see a significant difference between a plant and an animal needs to find another line of work.

  5. Why do so many lawyers get away with lying in court, Jamie Yoak?

ADVERTISEMENT