• What's a non-compliant ATM owner to do?

What's a non-compliant ATM owner to do?

Dan Antoni is a guy with a problem. The Pullman, Wash. realtor owns an ATM (just one) that he's still paying for. Both inside and out, his ATM is incapable of the upgrades needed to meet ADA regulations implemented on March 15. The reach is too high and the operating system too old to add a headphone jack and speech recognition software.

But these problems are not The Main Thing, which is that no one can tell him exactly what he should do with his obsolete ATM on March 15.

"I've been talking to so many different people … I talked to the attorney general's office in DC, I've talked to a number of people who addressed safe harbor, undue burden and all of that," he said.

Antoni is weighing several potential courses of action: Claim undue burden? Unbolt the ATM from the floor and declare it exempt because it's mobile (maybe too mobile in the event of a ram raid)? Convert it into a gun cabinet?

Fact — or wishful thinking?

Dan is one of an unknown but assuredly large number of ATM owners who have no firm idea what to do with machines that will fall out of compliance with ADA regulations late this week. And for the operator seeking advice, it can be difficult to separate fact from fiction. "There's a lot of people out there saying all sorts of things, but most of them don't have good information," said Sam Ditzion, president and CEO of Tremont Capital Group.

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For instance, some in the industry say that if an ATM owner can produce a written plan of action for bringing machines into line with regulations, they'll be fine. But there has been no statement from the Department of Justice to this effect. "I would say you're absolutely not fine," Ditzion said. "It's certainly better to have a plan than not, but it does not get you off the hook by any means. You're still very, very vulnerable; it means you're not compliant."

Those in the industry who are hoping that the Department of Justice will set a grace period for compliance are also "not fine," according to Denise Grace, vice president of processor relations for Credit Union 24. She said she has been checking the DOJ website regularly for updates and notices regarding the new regulations. "I have not seen or heard about a grace period; there hasn't been any notification out about a grace period," she said.

And then there are those like Antoni, who think they might be covered by an escape clause in the regulations, but don't know whether they'll be "fine" or "not fine". An attorney named Jody at the DOJ told Antoni that he might claim exemption. "She's saying, 'It's an undue burden; the machine cannot be modified because it's too old,''" Antoni said. "But she says 'I think you've got a get-out-of-jail-free card ... if it's not fixed to the floor or the real estate then it's not applicable under the ADA.'" He's now giving thought to removing four bolts that anchor his aging ATM to the lobby floor in the building he owns.

Which may or may not be "fine". "The definition of a non-fixed ATM is very murky," said Ditzion, "ATMs that are bolted down to the floor for security purposes — those are most likely viewed as fixed, not non-fixed. ATMs that have phone wires going into the store location, those are could be interpreted as fixed, not non-fixed." Antoni's circa 2000 ATM certainly is not wireless. At any rate, the questions of fixed-not fixed or undue burden would be decided in court, which Ditzion called a "very expensive proposition" that could run into the tens or even hundreds of thousands of dollars for legal fees alone.

What are the options — and the odds?

So what's an owner to do? Said Grace, "Given the recent lawsuits about surcharge fees and what's going on in the ATM industry ... it's under intense scrutiny right now. We are recommending to the ATM owners that if they're not in compliance, then they need to strongly consider shutting down the ATM to avoid any potential civil suits."

Such strong measures might not be necessary. In the case of complaints to the DOJ, several discussions and warnings usually occur before the government makes a motion to file suit. Of course, this does not preclude a private citizen from filing a civil suit at any time. But with ADA lawsuits, awards tend to be smaller, making "drive-by" suits less attractive, said Ditzion.

Nevertheless, they happen. Last June the British tabloid, The Daily Mail, ran an article about a wheelchair-bound double amputee in Brooklyn who had filed 87 ADA lawsuits — including one against a pedicure spa — each demanding $500 for the injury of being denied access to a public building. So far, he's won thousands, the article said. If all the cases are wins, his lawyer could come away with as much as $1.3 million.

In a presentation delivered on March 1 at the ATMIA conference in San Antonio, Ditzion said that up to half of America's ATMs will not meet the new ADA standards on March 15. It seems a shocking number at first — until one considers the intricacies of compliance and the ambiguity of some of the ADA standards.

"Part of the problem is that a lot of operators, both bank and non-bank, are not aware that they're not compliant," Ditzion said. "I think because of misinformation a lot of people think they're compliant that are not … in which case they're not going to do anything to get compliant. And that's a big problem."

Not that half of the nation's ATMs will go dark on the 15th. Initially at least, most owners will get away with non-compliant machines, said Ditzion, and it will more likely be the larger operators — banks and non-banks alike — that "kind of have targets on their back." For these larger operators, he said, an audit of all ATMs was an absolute need given the innumerable ways a machine can fail to meet ADA standards.

As hard as it is, the final decision about what to do with a non-compliant ATM on the 15th rests with the owner, whether his fleet comprises exactly one machine or one thousand and up. Until lawsuits chisel out precedents, no one knows how the rules will be interpreted and applied. And the only guarantees against being one of those precedent-setting cases are compliance and pulling the plug.

For more on this topic, visit our regulatory issues research center.

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