Customers File 9 Federal Lawsuits Seeking ATM Fee Payback
http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_627580.html
By Jason Cato | TRIBUNE-REVIEW | Monday, June 1, 2009
ATM transactions might cost a number of financial institutions and operators in Western Pennsylvania more than a nominal fee if they lose a rash of lawsuits filed in federal court in Pittsburgh.
Customers filed nine lawsuits during a two-week period claiming they used automated-teller machines that violated the Electronic Funds Transfer Act because “no notice was posted ‘on or at’ the ATM,” as federal law requires. The law requires notifying customers of fees by signs located on or near the machines and on-screen before transactions are completed.
Each lawsuit alleges there was no sign, although customers were notified on the screen of fees ranging from $1 to $2.
“Go to 20 ATMs, and I think you’ll see that people tear the stickers off everyone’s machines,” said Tom Ronalo, president of ATM Cash World in Green Tree.
Ronalo’s company is being sued by a Wexford man who claims a machine in a Coraopolis convenience store violates the law. Dale Holland said he was illegally assessed a $2 fee. Other defendants include Clearview Credit Union, Northwest Savings Bank and Allegheny Valley Bank of Pittsburgh.
“We’ve got a thousand machines,” Ronalo said. “People tamper with them. I don’t see how anybody can be damaged by that.”
Congress saw differently when it made several amendments to the law in the 1990s, though lawmakers placed a $500,000 limit on the amount a company can lose through a class-action lawsuit.
“The overwhelming majority of financial institutions and ATM operators are in compliance with the law,” said Bruce Carlson, a Sewickley lawyer whose firm filed the nine lawsuits and seeks class-action status for them. “But the law speaks for itself. The requirements are unambiguous.”
Carlson said legislators encouraged lawsuits as an enforcement tactic because the government lacks the resources to make sure each machine complies with the law.
“These lawsuits and publicity will make sure everyone soon is in compliance,” Carlson said.
Class-action lawsuits often recoup minimal losses for many people, said Jonathan Klick, a University of Pennsylvania law professor.
“Individually, you would never bring your own case if it cost $5,000 to win $1,000,” Klick said. “If we didn’t have these cases litigated, these companies would have nothing to worry about and no reason to change.”
A Chicago bank this year settled a similar lawsuit for $75,000 after it was sued for charging customers $3 per transaction instead of the $2 it told them they would be charged. Of the settlement money, the person who sued received $3,000 and his lawyers took $31,000. The remaining $41,000 will be split among the class-action members, with each getting up to $75.
