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. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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