Feb. 10, 2012
NACS, has joined with a coalition of other financial entities to ask Congress to modify a law requiring redundant ATM signage that has prompted numerous frivolous lawsuits, according to a news release on the NACS website.
The organization made its request in a letter to legislators; in addition to NACS, signatories included the American Bankers Association, American Gaming Association, ATM Industry Association, Credit Union National Association, Electronic Funds Transfer Association and Independent Community Bankers Association.
“We are writing to request your assistance in eliminating an unnecessary ATM fee disclosure requirement that has encouraged a large and growing number of frivolous lawsuits across the nation,” the letter begins. “If unchecked, these lawsuits will threaten the economic viability of ATM operators and may result in reduced consumer convenience.”
Pursuant to The Electronic Fund Transfer Act, ATM operators have been required to provide two notices to consumers regarding the imposition of a fee for use of the ATM — one incorporated into the video monitor and another on a placard attached to the ATM. In the absence of the placard, operators can be subject to class action lawsuit awards of “the lesser of $500,000 or 1 percent of the net worth of the [ATM operator]”, plus attorneys’ fees and costs.
The letter said that this “statutorily-prescribed bounty” had generated incentives for people to remove the placards, then launch spurious lawsuits. “Accordingly, on behalf of our members,” the letter concludes, “we respectfully request that you pass legislation eliminating the unnecessary placard notice requirement contained in the EFT Act. The repeal of the dual signage provision will stop the flood of frivolous litigation and cause no harm to consumers.”
For more information on this topic, visit our regulatory issues research center.