MADISON, Wis. (1/14/11)--CUNA Mutual Group is warning its policyholder credit unions of a "significant" spike in lawsuits against credit unions related to ATM fee disclosures required under Regulation E, according to several league and state association newsletters. CUNA Mutual's Credit Union Protection Claims division has seen a steady increase in the number of class action lawsuits filed against credit unions. Twelve new suits were filed between mid-December and the new year (Life is a Highway
and LoneStar Leaguer
Jan. 13 and eWeekly
Jan. 12). The lawsuits involve missing signage on or at the ATM and incorrect fees disclosed on the sign at the ATM. Many also involve remote ATMs serviced by third-party vendors, said CUNA Mutual. "Many credit unions involved in the lawsuits erroneously believed the fee notice sign was not necessary since the fee was disclosed on the terminal screen of the ATM." Changes in fees for ATM transactions prompted some of the lawsuits. The regulation requires credit unions to post a sign--in a prominent, conspicuous location on and at every ATM they own or operate--stating that a fee will or may apply. The warning noted that the regulation does not require the actual
fee to be placed on the sign. It also requires disclosing the fee on the terminal screen or paper notice before the consumer is committed to paying the fee. The fee also should appear on the transaction receipt. CUNA Mutual also warned credit unions to develop and maintain written procedures for inspecting all their ATMs regularly--either weekly or when the machine is serviced--to ensure the ATM fee signs are intact. Credit unions should photograph each ATM at the time of inspection, maintain an inspection log for all ATMs, and have management review the log to ensure inspections are taking place properly. The ATM inspection log should contain:
* ATM location inspected; * Date of inspection; * Status of the sign (missing or present); * Action taken, such as replaced sign or notice; and * Initials of the employee performing the inspection.
CUNA Mutual also suggested that credit unions maintain a supply of signs/stickers to replace missing ones, and periodically test the ATMs using a non-credit-union issued ATM network card or debit card to confirm the fee appears on the screen and the transaction receipt. It suggested general language for signage and cautioned credit unions to be alert for damage or removal of signs during remodeling projects.