ATM Loophole Lawsuits Filed; Businesses Warned To Comply

OCEAN CITY — Resort business owners and operators this week are being warned about posting clearly marked signs about transaction fees for ATM machines after a rash of lawsuits exploiting a little known loophole have been filed against several local establishments.

Under the federal Electronic Fund Transfer Act, which governs ATM transactions, there is specific language relating to the notification requirements for extra fees. Users of ATMs know there is typically a prompt on the screen advising the consumer of the transaction fee and the transaction can’t be completed until the user signs off on it.

However, what is not readily known is that owners and operators of the ubiquitous ATM machines are also required to post a written notice on or near the machines advising consumers of the transaction fees.

A rather innocuous clause in the statute requires a sign or notice of transaction “shall be posted in a prominent and conspicuous location on or at the ATM at which the electronic fund transfer is initiated by the consumer.”

At least one man, James Buechler, 47, of Sparrows Point in Baltimore, has clearly discovered the loophole and appears to be exploiting the posting requirement clause for personal gain.

Buechler has filed dozens of suits against business owners and ATM operators in federal court claiming his ATM transactions were illegal because there were no signs posting transaction fees other than the typical disclosure on the ATM screen. In each case, Buechler is seeking a total of $5,000 in damages, including $4,000 in actual damages and $1,000 in statutory damages along with attorney fees and costs.

Several local businesses have been caught up in the apparently legal but not entirely ethical operation in recent weeks including as many as five in Ocean City. The ABCO Investigations and Protection Agency in Berlin is acting on behalf of several local businesses targeted by the lawsuits. ABCO Detective Samantha Miller this week laid out the agency’s findings thus far.

“An individual is visiting local businesses and using their ATM machines to withdraw money,” she said. “He then looks for a sign posted stating that there is a service fee for using the machine. If there is not a sign posted, only a screen stating there is a fee, he then automatically files a lawsuit in federal court suing the establishments. He has hit five businesses already that we know of and we are sure there are more.”

Indeed, there are many more. A check of federal court records this week indicated Buecher has filed six of the civil suits thus far in 2012 alone, including at least two that have targeted local businesses. For example, Buechler filed suit against Tiki Sunrise in Ocean City on April 2 and targeted Fager’s Island with a suit filed in federal court on Feb. 14.

Buechler has filed six suits just three-plus months into 2012, along with 12 in 2011, eight in 2010 and seven in 2009. All in all, since he began exploiting the little known posting requirement language in the EFTA statute, Buechler has filed 33 total civil suits in U.S. District Court since 2009, of which 23 have been settled. At least one was later dismissed because the plaintiff information was wrong, but in most cases, the closed cases were settled before going to trial because the cost of litigation would be much higher than reaching a settlement.

“It appears he has certain attorneys involved with him and it is a structured scam to make quick cash for both parties,” she said. “He knows that a settlement offer will almost always be made because it is cost prohibitive to fight it in federal court.”

In each of the suits, Buechler is represented by attorney E. David Hoskins of Baltimore. A quick check of a handful of the cases revealed the language in the complaint and the damages sought are precisely the same.

“Each of the named defendants is responsible in some manner for the conduct alleged herein and for the injuries suffered by the plaintiff as a result of the defendant’s wanton and illegal conduct,” the complaint reads. “Because the defendants did not post the required notice, they were not permitted to charge any usage fee to plaintiff James Buechler.”

In each of the cases that have been settled thus far, it is uncertain if Buechler has been awarded the entire $5,000 in damages plus attorney fees and costs he was seeking. Online court records indicate when a case has been settled, but they rarely include settlement accords in terms of damages awarded because of strict confidentiality agreements.

Miller said ABCO is representing clients already caught in the ATM civil suit web and is attempting to warn other businesses in the area to post clearly marked signs to avoid being targeted.

“Everybody knows there is a fee,” she said. “He’s using a loophole to claim it has to be posted somewhere other than just on the screen. We’re not even sure if he isn’t the one taking down the signs.”

Buechler could not be reached for comment on this article.

9 comments on “ATM Loophole Lawsuits Filed; Businesses Warned To Comply

  1. This is something similar to another guy suing because businesses were not complying with handicap laws. He didn’t get much from any one suit but he filed several and money adds up.

  2. If it were a town ordinance you better bet the there would be an employee out fining them for cash for the government. This guy is not scamming, he is only obeying the law as written. More power to him. Wish I’d have known about it first. Like a boardwalk T-shirt merchant wouldn’t rip you off!!!!!

  3. I always look for the fee before using any ATM. No sign? I don’t use it because I like to know beforehand the fee for withdrawing my own money.

  4. Why is it considered a ‘loophole’ when it is clearly spelled out in the law? I personally don’t use ATMs maybe because I can predict my future better than others. But those who rely on ATMs, deserve to pay a hefty fee for the convenience of having their money readily available. Go Buechler !!!

  5. Bet the businesses that were ignoring the law start following it now. Maybe we should give him a reward for his community service.

  6. If posting the signage is required by law, why is it being called a loophole? It makes it sound like Mr Buechler is scamming the companies. He is NOT, he is just following the letter of the law.

  7. This is not a scam, this is someone suing businesses who are not complying with the law. Why should you have to get to the screen before you decide if you want to pay the fee? Someone may draw the line at $3.50, some may not.

  8. I only use ATMs at credit unions because I haven’t had a BANK account in YEARS. Almost all credit unions have no-fee ATMs. Doesn’t matter if you belong to that credit union or not, they are all part of a network that honor each other.

  9. …..conduct alleged herein and for the injuries suffered..”
    Injuries? All he should be rewarded is the ATM fee. In most cases of a business not complying to the letter of the law, the business is given time, usually 90 days to fix the violation. Why should this be different? After all, violation or not, a person is warned on the screen that there is a fee so he can cancel if needed. It’s not like the person must pay the fee before knowing what it is.

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