News

Surcharge sticker fee lawsuits cropping up across several states

August 9, 2011

The Credit Union Times reports that there are 44 lawsuits across 14 states against credit unions and community banks over alleged ATM compliance violations as of June 30.

All 44 lawsuits involve alleged violations of Regulation E, the regulation that requires banks, credit unions and other ATM deployers to post notices on ATMs that a fee may be charged to make a withdrawal or check a balance at the ATM.

The fee amount also must be disclosed before the cardholder commits to paying for it.

"The lawsuits typically involve missing signage on or at the ATM and incorrect fees disclosed on the sign at the ATM," said Brad Mundine, CUNA Mutual senior manager of Credit Union Protection Risk Management.

In a recent case, LA Financial CU agreed to pay up to a total of $33,889, at a maximum of $10 per claim.

"In addition, many of the lawsuits involve remote ATMs serviced by third-party vendors. 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," Mundine said.

According to the article, CUNA Mutual recommends that credit unions routinely check all ATMs to ensure compliance and to record those inspections.

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