A requirement that automated teller machines post notices on or near the machine will be repealed under a bill Congress has sent to President Barack Obama.
The proposed amendment to the Electronic Funds Transfer Act has been a boon for some plaintiff attorneys who filed lawsuits against ATM providers where the notices weren’t posted, said Ice Miller partner Bart Murphy. ATM providers still are required to disclose fees onscreen and gain a user’s consent before the fees can be assessed, Murphy said.
The proposed change “means for both financial institutions and retailers that are operating ATMs that they no longer have to deal with potential class actions for what’s essentially a meaningless offense,” Murphy said. The posted notice provision is “a technical requirement that’s outlived its usefulness,” he said.
Ice Miller has represented financial institutions and retailers who have faced class-action suits filed when someone has used an ATM where the posted notice was missing or had been removed from the machine, Murphy said. He noted that one Chicago-area plaintiffs’ class action firm had collected more than $1 million in attorney fees from filing such cases.
The American Bankers Association, the National Association of Convenience Stores and other national organizations have lobbied for the proposed change to the Electronic Fund Transfer Act and its implementing rule, Regulation E (12 CFR 205.16), which require that all ATMs must have two notices of a usage fee – one on-screen, and one attached to or near the ATM.