Large banks generally have tackled new rules requiring ATMs to have voice-navigation features for the visually impaired, but for small banks it's another story.
In the wake of a recent flurry of class-action lawsuits alleging certain banks' ATMs are not accessible to the visually impaired, smaller banks and independent ATM deployers are worried about their legal exposure.
Some 17 class-action lawsuits filed against banks in Pennsylvania and Ohio on behalf of a single plaintiff may not be the last, attorneys say (
Many older ATMs likely do not comply with the element of the Americans With Disabilities Act that went into effect March 15 requiring the machines to include a jack plus audio-navigation cues for visually impaired consumers, experts say.
And upgrading such ATMs in many cases either is not possible or not cost-effective.
"Quite a few of the ATMs out there owned by mom-and-pop operators may not be compliant," Mercedes Kelley Tunstall, an attorney with Ballard Spahr LLC, tells PaymentsSource.
Such operators technically are required to comply with the new provision of the act, but many may not do so, Tunstall says.
Operators with 10 or fewer ATMs likely won’t fall into the crosshairs of attorneys seeking opportunities through class-action lawsuits, she suggests.
It remains unclear where the liability would fall for small banks that outsource ATMs to third-party networks. "Many small operators may just bypass compliance and hope for the best," Tunstall says.
Independent operators that lack banks' deeper pockets may not be big enough quarry for attorneys seeking to generate fees from those in violation of the provisions, Sam Ditzion, CEO of Boston-based ATM consulting firm Tremont Capital Group Inc., tells PaymentsSource.
"The smaller operators probably are not going to be targets because it's not worth initiating legal action against them," Ditzion says. "Banks and bigger nonbank operators are the ones that need to worry."
All ATM operators are subject to potentially steep fines from the Department of Justice for violating the Americans With Disabilities Act, but the department rarely targets smaller operators for such specific violations, Tunstall says.
So far, three banks out of the initial 17 sued have settled with the plaintiff, and there is no evidence so far of more lawsuits being filed.
"We are checking constantly to see if any similar lawsuits are filed anywhere," Tunstall says. "It's possible (the lawyer in the first cases) is putting this up as a balloon to see how far it goes. He won't know how profitable it could be until he settles with the larger banks."
The cost to upgrade ATMs to include voice-navigation cues for the visually impaired varies widely, Tunstall says.
The breadth of an operator's ATM fleet, plus the complexity of back-office software and how it integrates with the machines' core firmware generally dictates the cost of adding voice-navigation, she says.
"For some operators, upgrading is very costly, and they have to weigh that against possible legal considerations," Tunstall says.
For ATM operators of all sizes, it is now a waiting game to see if further class-action lawsuits emerge.
"From what we are hearing, this is not the end," Tunstall says.
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