Two local retirees in Fowlerville, Mich., say they are fed up with paying ATM surcharges where there is no notice and are traveling the country to withdraw cash at targeted ATMs, then filing suit–five against local credit unions earlier this month.
The couple, Nancy Kinder and Ray Harrison, claim in their suits–they have filed 36 in two states over the past two years–that the credit unions and banks are violating the terms of the 10-year-old Electronic Funds Transfer Act by neglecting to post notice either “on or at the ATM” that noncustomers will be assessed a surcharge for withdrawing cash at the machine. The duo has embarked on several road trips over the past two years to target and photograph disclosure-less ATMs.
Kinder and Harrison filed suit in federal court here earlier this month against Lenco Credit Union, Michigan Schools & Government Credit Union, Jackson County Credit Union and Northwood Credit Union, seeking damages. The purported class actions are filed on behalf of everyone who may have withdrawn cash from the ATMs and paid a surcharge.
The couple also has sued Elga Credit Union, Sunrise Family Credit Union, Mainstreet Savings Bank, Dearborn Federal Savings Bank. Bestbank, Michigan Commerce Bank, Traverse City Bank, First Community Bank, Centra State Bank and Northwestern Bank.
While many of the banks are assailing the actions as nuisance suits, others are choosing to pay. Independent Bank, which operates 40 ATMs in local communities, agreed earlier Wednesday to pay $350,000 to settle the EFTA claims. Those funds, according to a lawyer representing the couple, are being donated to local charities.
CUNA Mutual warned credit unions recently about a nationwide proliferation of such suits and cautioned credit unions that a violation of the law could result in fines of up to $500,000, as well as attorneys fees.
In another development, a plaintiff in a new suit in Houston claimed on April 22 that Harris County Federal Credit Union is in violation of the EFT Act by failing to post the proper notice of a surcharge for non-member cash withdrawals.
Plaintiff Andrew Richardson has asked the federal court in Houston 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.
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 EFT Act, credit unions and banks must post a notice outside the ATM disclosing surcharges for non-credit union customers. The surcharges generally range from $2 to $3.50 per cash withdrawal.
In Michigan, more than 30 such lawsuits are pending in the state’s two federal courts, including one that Independent Bank settled April 19 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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