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ATM fee notices attacked

By Marcie Geffner · Bankrate.com
Tuesday, August 7, 2012
Posted: 9 am ET

The U.S. House of Representatives has passed a bill that would eliminate an ATM fee disclosure requirement.

Currently, the federal Electronic Fund Transfer Act requires banks, credit unions and others that operate ATMs to provide two notices that a fee might or will be charged. The first notice must be on the machine, the second on the screen or a paper printout.

Failure to provide both notices opens the door to consumer class-action lawsuits.

Industry groups have charged that plaintiffs in these lawsuits intentionally removed, destroyed or damaged the notices, then photographed the machines to demonstrate supposed noncompliance. The temptation is high since, according to the Independent Community Bankers of America, or ICBA, plaintiffs can recover $500,000 or 1 percent of the ATM operator's net worth, whichever is less.

The bill, H.R. 4367, would end the on-machine notice requirement. The on-screen or on-paper notice would still be required. However, that notice typically appears only after the consumer has initiated some sort of interaction with the machine.

Industry groups applauded the House's passage of the bill.

ICBA CEO Cam Fine said in a statement that the notice requirement "has led to baseless and frivolous lawsuits that threaten the viability of ATM operators." The group is a major supporter of the legislation.

Bill Cheney, CEO of the Credit Union National Association, said in a statement that credit unions "appreciate" passage of the bill, which "eliminates a frustrating regulatory burden."

"House passage of this legislation is an important milestone," Cheney said, "but the work is not done. We urge the Senate to take up this measure as soon as possible and provide credit unions with much-needed regulatory relief."

Fee notices are all the more important for consumers because fees to use an out-of-network ATM rose to new highs for the seventh consecutive year in 2011, according to Bankrate's 2011 Checking Account Survey, which tracks bank checking account fees.

The survey found that the average fee banks changed noncustomers for an ATM transaction last year was up 3 percent to $2.40 compared with $2.33 in the prior year.

Consumers generally can avoid ATM fees by using their own bank's ATMs.

Follow me on Twitter: @marciegeff

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26 Comments
J Robison
August 11, 2012 at 12:21 pm

Probably the best remedy for excessive ATM and other add on fees is to switch from large commercial banks to credit unions and locally owned savings and loans; CU's are the best bet because they are run to give benefits to the membership as opposed to making huge corporate profits.
Also, for those eligible, there is USAA which provides a wide range of banking and financial services, including insurance, credit cards, buying services for many items, investment and financial management services, as well as regular bank checking and savings through USAA FSB.

dezznutz1001
August 11, 2012 at 12:18 pm

Amen @ Rob P...not enough common sense people out there obviously, its a product of our Nanny State

dezznutz1001
August 11, 2012 at 12:15 pm

This is much needed, these costs ALWAYS trickle down to the consumer.

What? Do some of you think some small time ATM operator is gunna eat 50K and not pass those costs/losses on to the consumer?

Some of you need to understand how Business and even the Science of Economicss works

Especially since thanks to Dodd/Frank bill, you cant have Free checking accounts anymore...regulation costs passed on to us, the consumer, thanks out of touch, doesnt read the bills they pass, federal Govt!

DezzNutz
August 11, 2012 at 12:14 pm

This is much needed, these costs ALWAYS trickle down to the consumer.

What? Do some of you think some small time ATM operator is gunna eat 50K and not pass those costs/losses on to the consumer?

Some of you need to understand how Business and even the Science of Economicss works

Especially since thanks to Dodd/Frank bill, you cant have Free checking accounts anymore...regulation costs passed on to us, the consumer, thanks out of touch, doesnt read the bills they pass, federal Govt!

Parsley
August 11, 2012 at 11:56 am

Sage and I must have the same Mom. ATM's are like vending machines, privately owned and maintained. Someones got to pay for the convienience and risk. Banks are in it to win it anyway. Most charge for teller activity also. Hurry up and wait!

Allah Ackbarf
August 11, 2012 at 11:36 am

Having 2 notices is nice but one would suffice.

One on screen should be required, but the other(s) could be optional. The bank can place as many extra notices as they like, which would probably be none, of course, but as long as one was on screen that would be fine.

A notice could even be permanently embedded into the plastic of the ATM. Tampering cannot ever be prevented, but a nice security camera way up high might document the fraudsters tampering. The class action is what makes things difficult.

ATMs with a headphone jack could give notice via voice if they don't already.

If banks offer 2 factor authentication requiring a phone it can include a notice to the customer in the verification text call/message. All voluntarily, of course, except the on screen message of the atm. It's good enough for now.

Eliminating the class action fraud about as much as is currently possible.

Gene Shiller
August 11, 2012 at 10:21 am

I have to agree with Sage. I dislike some banking practices as much as anyone else, but opportunistic, lying dirtbags are to be reviled. Use your own bank's atm. I do. Believe me, it's not difficult.

Howard Kirby
August 11, 2012 at 10:11 am

I feel sorry for the banks the Bigger Crooks they give .30% on my savings and charge 9.7% on a personal loan.

william harrington
August 11, 2012 at 10:04 am

The banks charge to take your money out of mac machines, they charge customers to cash checks that dont have accounts there which add up to trillions im sure yet they need bailouts all the time. Do they even claim this money and pay taxes on it whos checking that.

Sage
August 11, 2012 at 8:59 am

Stop your complaining! This is all because a small minority of us (banking customers) got greedy and vandalized machines, looking to scam the banks with lawsuits. Look, I hate banks as much as the next person, but this is all the fault of a few dirtbag customers, who have ruined it for everyone. (As my mother used to say "This is why we can't have anything nice!")