Academic journal article ABA Banking Journal

For Want of a Little Sign ... Gotcha! Check Your "On-Machine" AIM Fee Notice. Plaintiffs' Attorneys Are

Academic journal article ABA Banking Journal

For Want of a Little Sign ... Gotcha! Check Your "On-Machine" AIM Fee Notice. Plaintiffs' Attorneys Are

Article excerpt

[ILLUSTRATION OMITTED]

Some days you wonder if you should just have stayed in bed. That's how bankers in several states may be feeling after having been notified of a class-action lawsuit against their institution for a violation of Regulation E on one of their ATMs.

Reg E requires disclosure of fees that are or may be associated with using an ATM. Two forms of notice are required, says ABA Associate General Counsel Greg Taylor. The first is the on-screen or paper notice, which appears before a transaction is completed alerting the consumer that a fee will be charged and allowing the person to cancel the transaction. The second is called the "on machine" notice and must indicate that a fee may be charged.

Bankers in Michigan, Texas, Ohio, Pennsylvania, and elsewhere have noticed the growth of a "cottage industry" of class-action suits over a missing sign. In one bank's case, a renovation was the cause of the missing sign. In other cases signs have been removed by vandals. Taylor says the Electronic Funds Transfer Act offers several reasons why an ATM operator would not be liable, one of which is vandalism. Another is that the violation was not intentional.

The problem, according to a banker involved in a fee-notice case, is that defending against a class-action suit requires attorneys with special--i.e. expensive--skills. It's less costly to settle than to challenge the suit in court.

"A judge may throw out these cases," the banker says, "but to get to that point, the clock is ticking, and the plaintiffs will likely inundate you with requests." He calls these suits, "shakedowns."

Obviously it would pay to check your ATMs often to be sure the signs are in place, possibly even taking pictures. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.