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Location, location, location: ATM Fee Disclosure Edition

posted by Adam Levitin

The number one agenda item for small banks is to repeal the physical, on-machine disclosure requirement for ATMs.  Yes, I'm serious, that, that is the top agenda item for small banks. And they wonder why they're not doing so well...

Still, it's worth understanding why they're focused on this issue.  The Electronic Funds Transfer Act requires disclosure of ATM fees both physically on the machine, as well as on the screen. Failure to do so subjects the financial institution to liability, including actual damages (close to zero), statutory damages (up to $1000/violation but with a class action cap) and attorneys fees. As it happens a cottage industry has emerged bringing strike suits over missing ATM signs (query how signs just fall off ATMs...). I've blogged a bit about it here

This weekend I saw an ATM that shows why merely requiring physical disclosure doesn't accomplish much--the disclosures were perhaps a foot off the ground and the ATM was in a space where kneeling was impractical (unless you want to get hit on the head with a door). I'm not sure if that was the fee disclosure (which must be in a "prominent and conspicuous location") or some other disclosure, but it's pretty useless for anyone who isn't crawling.  Check it out after the break.



The credit union(s) I use allow me to use Allpoint ATMs with no ATM fee. That, with the Allpoint ATM locator app installed on my BlackBerry, and I can find their ATMs readily when away from home.

Wouldn't that disclosure be hard to read for someone using that ATM from a wheelchair anyway? Possible ADA action there.

Does it matter that that particular machine doesn't seem to belong to a bank? The only visible signage is for ATM USA, a company that provides ATM services to banks as well as retail and service locations. I'm guessing this was a restaurant or mall? (judging by the background.) It's possible that banks are bad about signage requirements, but posting a picture of a machine that is not affiliated with a bank doesn't really make the point.

While that is certainly not their top priority it does pose a credible risk as class action suits are piling up because the sticker on the machine has been removed (perhaps by the person bringing the suit). Even though the fee is again disclosed and approved by the customer before the transaction is conducted, failure to have the sticker on the machine could result in a hefty settlement to avoid a class action suit. What a racket for the lawyers and their minions. Hopefull the Senate will soon act to remove this burdensome requirement.

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