WASHINGTON - NACS, along with the American Bankers Association, American Gaming Association, ATM Industry Association, Credit Union National Association, Electronic Funds Transfer Association, and Independent Community Bankers Association, sent a letter to Congress earlier this week asking for relief from a law requiring redundant ATM signage that has prompted numerous frivolous lawsuits.

"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."

The letter explains that subsequent to The Electronic Fund Transfer Act (the Act) and its implementing rule, Regulation E (12 CFR 205.16), ATM operators have been required to provide two separate notices to consumers regarding the imposition of a fee for use of the ATM.

One disclosure is incorporated into the video monitor and requires the customers to affirmatively opt-in (via pressing an ATM button) if he or she accepts the fee. NACS and those signing on to the letter "fully support this fee disclosure requirement."

The second disclosure, Regulation E, requires ATM operator to attach a placard to the ATM machine stating that a fee may be charged. Without such a placard attached, the statute prescribes that in a successful class action, plaintiffs can recover "the lesser of $500,000 or 1% of the net worth of the [ATM operator]", plus attorneys€™ fees and costs.

The letter maintains this "statutorily-prescribed bounty" has generated incentives for people to remove the placards and thus launch a spurious lawsuit. Indeed, "litigants have photographed the ATM without the placard notice and filed suit," the letter states.

The physical placard requirement is no longer useful (the letter explains that when it was enacted in the 1990s, it was useful, as off-premise ATMs were uncommon and they provided helpful information that was not clearly conveyed on the video monitors) as most consumers expect to pay a fee at an ATM unless they are using an ATM owned or operated by the bank or credit union where they have their account.

"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. Without relief on this subject, the number of these baseless lawsuits will continue to rise as will the cost of this service to consumers. Such actions could very well reduce the number of ATMs deployed and result in reduced consumer convenience."