"When ATMs first began, it made a lot of sense for signs on ATMs to alert consumers to fees," Ford said. "The screens tended to be small, the type primitive and there was no ability to easily opt out of the transaction. But now, consumers all expect to be charged a fee at an ATM and have to proactively opt in; they have to press a button accepting the fee, before the transaction goes forward.  The sign on the machine is completely redundant."

Ford stressed that his opinions about the ATM litigation phenomenon were his alone and did not represent the opinions of the ATMIA. He believes some attorneys have convinced consumers to peel off or otherwise remove ATM signs, conduct a transaction at the machine and then take a picture of the ATM without a sign to provide proof for a lawsuit.

"There is no way to prove it of course, unless you have a camera trained on the ATM to catch someone in the act," Ford said. "But in some of these cases where I have seen 10 of a firm's ATMs that had the right signs on them all [of a] sudden and at about the same time not have them, well, it makes you wonder."

Ford considers the attorneys to be the driving force behind these lawsuits. While the plaintiffs are limited to awards between $100 and $1,000, their attorneys can collect anywhere from $50,000 to $100,000 per case. Those are only on cases that actually make it to trial, he added. 

"It's getting the case recognized as a class action that really gives them the leverage. At that point, they can approach the ATM deployer for a significant settlement and make a good sum of money without ever having to go to trial," he said.

Still, there are signs the litigation bonanza might be coming to an end. Credit unions, banks, independent ATM deployers and convenience store operators have written a letter to two Congressional committees for legislation to remove the ATM disclosure regulation that has led to in an increase in lawsuits.

The organizations that signed the letter included CUNA, the American Bankers Association, American Gaming Association, ATIMA, Electronic Funds Transfer Association, Independent Community Bankers Association and the National Association of Convenience Stores. A NAFCU spokesman said the association had also helped write the letter even though the group's name did not appear on it. 

The Feb. 8 letter to the leaders of the House Committee on Financial Services and members of the Senate Committee on Banking, Housing and Urban Affairs asked lawmakers to eliminate the ATM disclosure requirement that appears in the Electronic Funds Transfer Act.

The organizations said the requirement has spawned a host of spurious lawsuits from litigants.The letter also picked up on Ford's theory of how these alleged violations occur, saying litigants have removed the posted notices and then photographed the machine without them and sued. They also argued the regulation had outlived its usefulness.

"A physical placard fee notice may have played a useful role when Congress first enacted the statutory provision in the 1990s," the groups wrote. "At that time, off-premise ATMs were relatively uncommon, and some consumers might have been unaware that they may be charged a fee for using an ATM. Also, many ATMs were not capable of providing the notice on the monitor."

Since then, the groups noted that off-premise ATMs have grown to more than half the ATMs in the country and asserted that fees have become an expected part of the ATM experience. 

"Today, consumers expect to pay a fee at an ATM unless they are using an ATM owned or operated by the bank or credit union where they have their account or their financial institution has agreed to pay for the use of the ATM," the groups wrote.

CUNA Deputy General Counsel Mary Dunn said that the ATM regulation and how it could be mitigated has been a topic during at least one meeting between CUNA senior leaders and Richard Cordray, the director of the Consumer Finance Protection Bureau, which has been given the authority to oversee EFTA.

According to Dunn, she and CUNA President/CEO Bill Cheney had urged Cordray to draft an exemption from the regulation requiring an external fee disclosure sign on an ATM if the machine required consumers to opt in to the fee on the screen. Dunn said Cordray expressed sympathy with credit unions and other ATM deployers facing the litigation, but remained doubtful whether the CFPB had the authority to issue the exemption.

Until an exemption is granted or the law changed, Ford said credit unions and other ATM deployers could reduce the chance of lawsuits by making sure they document the presence of the fee disclosure signs on the outside of their ATMs at least every time the ATM is serviced. They could also invest in clear coverings over the ATM signs to make them more difficult to remove, though both approaches would likely cost the deployer more money.

"It may cost an additional $1,000 or $2,000 to outfit ATMs to protect the signs," Ford said, adding, "but that might be better than $10,000 or $20,000 to settle a suit."