HARRISBURG, Pa. (4/6/12)--A federal judge in Harrisburg, Pa., has dismissed a lawsuit that had alleged a credit union violated the Electronic Funds Transfer Act (EFT) with improper ATM fee notification, saying in his ruling that the credit union showed undisputed evidence that an unknown third party had removed its posted notice illegally.
The suit was filed on May 24, 2011 by Gerald Rivello Jr., who withdrew funds from an ATM owned by Pennsylvania State Employees CU, a $3.8 billion asset credit union located in Harrisburg, on April 30, 2011, according to the court documents.
In the past two years, there has been a spike in the number of lawsuits filed by individuals against more than three dozen credit unions and banks based on missing ATM fee notifications. Some plaintiffs travel the country looking for ATMs without the proper notices attached, take photographs, and sue several financial institutions (News Now A.
In this suit, Rivello, who was not member of the credit union, alleged he was charged a fee for the transaction and alleged that at the time there was "no clear and conspicuous external notice at or near the ATM that a fee would or may be charged."
U.S. District Judge Robert D. Mariani, in a ruling issued March 28, ruled that Rivello failed to provide evidence rebutting the credit union's complete defense, citing section 1693 (h) of the U.S. Code, which says that if the required ATM notice has been posted by the operator in compliance with the law and the notice is subsequently removed, damaged or altered by any person other than the operator of the machine, the operator has no liability.
His ruling cited affidavits and photographs that indicated the credit union posted a compliant fee notice to the ATM in 2006, that none of the credit union's employees removed the ATM fee notice, and when employees discovered the sticker was missing during a routine examination of the machine, they promptly affixed a new notice to the ATM.
The credit union testified that on February 2011, it initiated procedures to provide for routine inspections of its ATMs to ensure the compliant notices were posted. On May 12, 2011, an employee noticed the machine did not have a properly affixed fee notice and replaced it and other signage on the ATM and photographed the machine. After the complaint was served another employee photographed the machine on Aug. 9, 2011 and the photo showed old adhesive next to the existing fee notice, which showed an earlier fee notice had been affixed.
"These affidavits present facts, which if unrebutted, require a finding that some third-party, and not the defendants, removed the required fee notice from the ATM," said the judge's ruling. Rivello failed to offer evidence that would cast doubt on the defense and did not offer a rebuttal beyond merely stating the factual allegations from his original complaint. "Plaintiff's papers and submissions to this court fail to provide any evidence rebutting [the credit union's] defense beyond the assertion that the ATM did not contain the appropriate fee notice. Such submissions do not constitute evidence of a disputed fact."
A rash of lawsuits in 2010 prompted CUNA Mutual Group to warn credit unions to develop and write procedures for regularly inspecting their ATMs to ensure their signs are posted, to photograph the ATMs at the time of inspection, and to maintain the inspection log for all ATMs and have credit union management review the log (News Now April 25, 2011).