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News Now

CU System
ATM fee-notice lawsuits spread to West Coast
MADISON, Wis. (4/18/12)--Lawsuits brought against credit unions and banks alleging violations of the ATM-fee disclosure provisions in the Electronics Funds Transfer Act (EFTA) are on the increase again, this time on the West Coast with the latest filed against a credit union in Washington state.

A class action lawsuit was filed Thursday by New York resident Don Anderson--who is also involved as a plaintiff in similar suits in six other states--in the U.S. District Court for the Western District of Washington, Seattle.

This time he sued North Coast CU, Bellingham, Wash., alleging that it charged him for a transaction at its Mt. Vernon, Wash., ATM on Dec. 2, 2011, in violation of the EFTA's fee disclosure provision.  According to the complaint, Anderson alleged that at the time of the transaction, "there was no notice posted 'on or at' the ATM operated by defendant apprising consumers that a fee would be charged for the use of the ATM." He also is alleged to have filed lawsuits in Arkansas, Texas, Louisiana, New Mexico, Oklahoma and Nevada.

News Now reported in December that Anderson had filed ATM fee disclosure lawsuits against four credit unions and nine banks in two states (Dec. 2). The credit unions included: FirstLight FCU, El Paso, Texas; Firestone Community FCU, Bridge City, Texas; Centric FCU, West Monroe, La.; and Monroe Telco FCU, West Monroe, La.

A number of similar suits have been filed by others as well, who travel around the country, looking for ATMs without notices posted on the machines and taking photos of the machines as evidence for their lawsuits. EFTA requires both an external notice physically on the machine as well as a notice on screen informing ATM users of fees charged for transactions. In 2010 and 2011, a retired couple, Nancy Kinder and Ray Harrison of Fowlerville, Mich., filed dozens of lawsuits in Michigan, New Mexico and Texas (News Now May 24).

The rash of nuisance lawsuits has prompted alerts to credit unions about their ATM procedures from CUNA Mutual Group. They also have prompted the Credit Union National Association to alert credit unions and the Consumer Financial Protection Bureau of the increase in lawsuits where ATM notices have been removed, damaged or destroyed (News Now Jan. 3). CUNA also conducted audio conference with CUNA Mutual Group to assist credit unions with the issue.

Credit unions and others have found that the outside notices on ATMs have in some cases been intentionally removed or destroyed without the financial institutions' knowledge.  Earlier this month, Pennsylvania State Employees CU, Harrisburg, Pa., succeeded in getting a court to dismiss an EFTA ATM fee disclosure lawsuit because the credit union showed undisputed evidence that an unknown third party had removed its posted notice illegally (News Now April 6).

However, several other financial institutions have settled the suits with some of the plaintiffs.

CUNA and credit unions have urged Congress to pass a measure to address the nuisance lawsuits filed. (See related story on the introduction of a bill in Congress that would address ATM disclosures in today's News Now Washington section, "Luetkemeyer/Scott bill would address ATM disclosure problems.")
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