Bankers received a Christmas present on December 20, 2012 when President Obama signed H.R. 4367, which eliminates the requirement for physical notices on ATMs regarding fees. That information is already disclosed onscreen, and consumers can’t continue a transaction without affirmatively acknowledging and accepting the possible fee.
The notices were originally required when onscreen disclosure was not always feasible. However, changes in technology have resulted in consistent, effective disclosures to consumers.
Unfortunately, previous law included a penalty of the lesser of $500,000 or one percent of the net worth of the ATM operator for violating the notice requirement. This bounty led to instances of litigants removing placards, photographing the ATM and filing a lawsuit before the ATM operator is aware of the missing sign. A rash of class action suits have been filed.
The question is whether or not this change is retroactive. The Cox Smith litigation team has taken the position that there is no basis for these lawsuits with the elimination of the statutory remedy. In any event, we believe punitive damages should not be available, even in cases alleging missing notices prior to the passage, and actual damages are nonexistent since the consumer had notice of the fee and agreed to pay it.
The next step is for the CFPB to amend Regulation E to eliminate the signage requirement in the absence of the supporting law.