The End is Near - Death of the EFTA ATM Notice Class Action The End is Near - Death of the EFTA ATM Notice Class Action

The End is Near - Death of the EFTA ATM Notice Class Action

No this is not another article about the Mayan calendar's end of world prediction. This is about a piece of common sense legislation enacted by Congress to shut down class action law suits against financial institutions and small businesses operating ATMs. The Plaintiff-class action bar has lost one of its weapons – the Electronic Funds Transfer Act (EFTA) ATM notice class action. No longer will the plaintiff-class action bar be able to slide a complaint over the teller window and tell the bank to "stick 'em up" and hand over the loot for the "grievous offense" of failing to post a notice on or near an ATM that the user may be charged a transaction fee – even though such a notice is also required to be displayed on the screen. Plaintiff class action firms across the country have seized on a provision of the EFTA that required ATM operators to post a notice on or near the ATM indicating that a user may be charged a transaction fee, if a fee is imposed for conducting a transaction at the ATM. This notice is in addition to the on-screen notice the EFTA also requires the ATM operator to provide to the user during the course of the transaction.

The EFTA allowed an ATM user to bring a private cause of action against the ATM operator if it failed to post the "on-machine" notice. Under the EFTA a plaintiff can recover statutory damages of between $100 and $1,000 per violation regardless of whether the plaintiff suffered any actual injury. The Act also allowed a plaintiff to recover costs and attorney's fees for bringing the action. The plaintiff class action bar filed hundreds of EFTA ATM notice class actions across the country and "held up" banks and retailers who operated ATM's for millions of dollars in settlements. This provision of the EFTA created ATM bounty hunters who prowled the country searching for ATMs without an on-machine notice. One such ATM bounty hunter filed 14 EFTA ATM notice class action law suits in the United States District Courts for the Northern and Central Districts of Illinois in a two year period. One Chicago-area plaintiff class action firm has reaped more than $1 million in attorney's fee awards as a result of filing these cases.

With due apologies to Mr. Francis Albert Sinatra, now the end is near and the plaintiff-class action bar faces the final curtain for EFTA ATM notice class actions. On April 17, 2012 Rep. Blaine Luetkemeyer (R-MO) introduced H.R. 4367 to amend the EFTA to eliminate the "on-machine" notice requirement (read more on that here). The bill was passed by the House on July 9, 2012 by a vote of 371-0. On Dec. 11, 2012 the Senate passed the bill by unanimous consent. A copy of the engrossed bill may be found here. The bill has been sent to President Obama for signature who is expected to sign the legislation. The reign of the ATM bounty hunter is about to end.


Bart Murphy is a Litigation partner in Ice Miller LLP's DuPage County, Ill. and Chicago Offices and his practice is concentrated on the defense of class action litigation and complex litigation matters. He has defended multiple clients in EFTA ATM Notice Class Actions and can be reached at or (630) 955-6392.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.


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