Class-action lawsuits alleging violations of ATM fee disclosure notices aren't new.
But now, the Credit Union National Association, or CUNA, is urging the federal Consumer Financial Protection Bureau, or CFPB, to suspend one of the notice requirements to stop the lawsuits.
At issue is the federal Electronic Fund Transfer Act, which requires ATM operators, such as banks and credit unions, to provide two notices a fee might or will be charged to use the machine. One notice must be on the machine. The second notice must be on the screen or a paper printout.
Failure to provide the notices creates an opportunity for a consumer class-action lawsuit.
In a letter to the CFPB, CUNA CEO Bill Cheney said called the notices "duplicative." He also said on-machine notices in some cases are being intentionally removed, destroyed or damaged without the operator's knowledge and pictures are then being taken to document the alleged noncompliance.
"If the litigants were concerned about compliance," Cheney wrote, "they should first bring the issue to the institution's attention to correct it or to the attention of the regulator. That is not happening, and ATM 'chasers' are going straight to court."
Class-action lawsuits over nominal fees tend to benefit attorneys more than consumers when the awards are distributed. Still, these lawsuits can serve as an incentive to companies to get serious about regulatory compliance.
The pitfall for consumers is that on-screen or paper printout notices typically appears only after some sort of interaction with the ATM has been initiated. It's a reasonable assumption a consumer who has already begun a transaction might be less inclined to walk away and avoid the fee.
Rather than attack the requirement, ATM operators should place and affix the on-machine notice in a way that deters malicious vandalism and take their own pictures to demonstrate good-faith compliance.
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