NEWS, EVENTS, PUBLICATIONS & EMERGING ISSUES

SW&M EMERGING ISSUE
August 7, 2009

CLASS ACTION LAWYERS TARGET CREDIT UNION DISCLOSURE OF ATM FEES ''ON OR AT'' ATM

Recently, a number of class action lawsuits have been filed around the Country, and in particular, California claiming inadequate disclosure of ATM fees in violation of Electronic Funds Transfer Act ("EFTA"). The class action lawsuits have being filed by the same California law firm (often using the same Plaintiff), alleging that certain Credit Union ATMs do not properly display the mandatory fee notice. The fee notice must: (1) be posted in a "prominent and conspicuous location" on or at the ATM machine; and (2) "on the screen of the automated teller machine or by providing it on paper, before the consumer is committed to paying the fee." [12 C.F.R., Section 205.16 (c).]

The lawsuits generally allege there was not notice "on or at" the ATM and the Credit Union improperly charged a fee to the non-Credit Union customer using the ATM. We have been advised that some ATMs have been "targeted," with what appears to be persons visually inspecting ATMs and later returning to use the ATM. We have also been advised that in some cases it appears the stickers may be been tampered with as well.

In short, Credit Unions are well advised (i) to ensure all ATMs have the proper notification under EFTA, and do so on a regular basis, (ii) to immediately place proper notification of fees "on or at" its ATM as well as on the screen if missing, and (iii) for those Credit Unions that have received a lawsuit (ensure the ATM video surveillance is retrieved and stored), and appropriate notices installed at the ATM in question to "cut-off" the chance for the class size to increase.

Please contact SW&M with specific questions about ATM notice fee questions and/or if you would like to discuss this issue in more detail.

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