Business Litigation And Counsel

ATM owners target of lawsuits

On Behalf of | Aug 26, 2011 | Hutchinson News

Cash machines could cost Twin Cities businesses if they’re missing a fee notice.

A recent flurry of federal lawsuits accuse local restaurants, bars and other ATM owners of charging fees to customers without proper disclosure.

At least four lawsuits filed in the past three weeks by Vadnais Heights attorney Tom Lyons Sr. seek class-action status and up to $1,000 each for all customers who paid to use the ATMs.

An attorney defending businesses in the suits, Troy Hutchinson, says he is working with others to consolidate the cases to fight the “opportunistic” claims.

Lyons said businesses that want to avoid litigation should follow the law. “The only way you can get the attention of a corporate wrongdoer is a lawsuit,” he said.

Under the Electronic Fund Transfer Act, ATMs must disclose fees not only on-screen, but also on the machine itself with a sticker or placard. The law allows ATM customers to file a class-action suit to recover up to $1,000 in damages plus legal fees if they’re charged a fee without these disclosures.

Recently sued businesses include Moe’s restaurant in Mounds View, Tavern on the Avenue restaurant in St. Paul, Scoop’s Pub & Grill in Coon Rapids and the owners of the Mermaid Wedding and Event Center in Mounds View. Officials at those businesses declined to comment or could not be reached.

Grand Forks, N.D.-based Alerus Financial agreed this summer to pay $60,150 among as many as 408 ATM customers, plus $2,000 to the lead plaintiff. Alerus declined to discuss the settlement.

But with attorneys fees, small businesses can face six-figure costs defending an ATM suit, said Hutchinson, of Briggs and Morgan.

The Minneapolis law firm has been retained to defend Minnesota businesses in at least six nearly identical cases of this kind as of this week, he said, adding that he is in talks with other firms to jointly fight these cases.

Hutchinson said he believes these “professional plaintiffs” file nearly identical suits after searching for ATMs without posted notices. In some cases, notices disappeared from the machines or were vandalized before the plaintiffs used them. Hutchinson said there’s no indication that the suing customers were responsible.

The Minnesota Bankers Association has warned its members about these kinds of suits, President and CEO Joe Witt said.

“This is just one of those regulations that banks are doing their best to comply with. … We understand that this is one of many costs of doing business,” Witt said.

About half of the ATMs in the United States are not owned by banks and charge their own fees, he said.

ATM owners can protect themselves by regularly checking the notices on their machines and taking photos to document their compliance before a lawsuit.

Downtown Minneapolis restaurant Seven has been sued twice for missing ATM fee notices, but was released from liability because it didn’t own the machine, said President and Chief Manager David Koch.

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