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Do you feature ATMs in your hotel, restaurant or conference center? If yes, you may be an unwitting target for ATM fee notice lawsuits. Here’s why: 

The Electronic Funds Transfer Act (EFTA) contains a provision requiring owners of ATMs to provide adequate notice to consumers about fees charged for using ATMs not owned by the consumers’ own bank. The EFTA states that you must notify these consumers twice regarding such fees:

  1. You must post an external notice on the body of the ATM “in a prominent and conspicuous location” stating what the exact fee imposed will be for performing a transaction on the ATM, and
  2. There must be a second notice on the screen, or by paper issued from the machine, which advises the user that they can avoid paying the fee and terminate the transaction before the consumer is irrevocably committed to completing the transaction.

Don’t have both notices? Then your ATM is not in compliance with the EFTA and if you own or operate the machine, you could face penalties for damages incurred by the ATM customer plus a statutory penalty of up to $1000. Worse, if a case is brought against you as a class action, you could be liable for up to $500,000 or 1% of your net worth—whichever is smaller—plus costs and reasonable attorney fees. That adds up to a significant potential recovery, which is why there are lawsuits being filed across the country as we type.

After some delay, the new federal regulations giving gift card holders greater protections took effect recently, adding to a patchwork of state consumer laws already in place. The new regulations apply to both issuers and sellers of store gift cards, gift certificates, and general use prepaid cards, such as prepaid Visas or Mastercards, sold after August 22, 2010. We’ve seen our clients consider conflicts between state and federal law, advertising policies for resellers, tax recognition on gift card income, and unclaimed property laws.

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About the Editor

Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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