Another Suit On CU ATM Disclosures

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HOUSTON – The proliferation of suits on ATM disclosures continued Friday with a new suit claiming Harris County FCU is in violation of the Electronic Funds Transfer Act by failing to post the proper notice of a surcharge for non-member cash withdrawals.

The plaintiff in the new suit, Andrew Richardson, has asked the federal court here to declare his suit a class action for all non-members of the credit union who used ATMs and were assessed surcharges absent the proper notice. “Because [the credit union] did not post the required notice, it was not permitted to charge a usage fee to Plaintiff and other class members for any ATM on which the required notice was not posted,” claims Richardson in his suit.

The latest suit is similar to a growing number of EFTA challenges being brought against credit unions and banks around the country. Last Monday, a couple of Michigan retirees who have been traveling the country to target non-compliant ATMs filed four suits against local credit unions alleging the absence of a notice of surcharges is in violation of the law. The couple has filed more than 30 suits so far against credit unions and banks over the EFTA.

Similar suits have been filed in California, Illinois and Texas. Some of the suits are being settled out of court from amounts ranging from tens of thousands of dollars to $2.5 million.

Under The EFTA, also known as Reg Z, credit unions and banks must post a notice outside the ATM disclosing surcharges for non-customers. The surcharges generally range from $2 to $3.50 per cash withdrawal.

Violations of the EFTA could bring fines of up to $500,000.

In Michigan, more than 30 such lawsuits are pending in the state’s two federal courts, including one that Independent Bank settled Wednesday for $350,000. That lawsuit involved more than 40 ATMs across the state, including machines in Troy, Bloomfield Hills and Beverly Hills. Each member of a class action who qualifies is entitled to up to $1,000.


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