ATM operators and banks have colluded to gouge customers every time they used ATM cash machines, a new federal class action suit charges.
The suit, filed in Manhattan federal court, complains that customers pay twice for the same transaction – an ATM fee to the bank and a surcharge to the ATM owner for the same.
The banks justify the fee to recoup an “interchange fee” they pay to ATM owners for the service.
But the suit alleges the banks collude with the ATM operators to charge the “unnecessary” and “fixed” interchange fee to justify the “artificially inflated” customer fees.
“The fixing of the interchange fee is a violation of the United States antitrust laws,” the suit states.
Defendants include Concord EFS, parent company of the Star ATM network, Bank of America, JP Morgan Chase, Citibank, Sun Trust Banks, Wachovia Corp., and Wells Fargo & Co.
All the banks charge ATM fees to customers ranging from $1.50 to $2 per cash withdrawal.
The suit says that customers who use ATMs not belonging to their banks are often charged another $1.50 surcharge.
But state officials have been thwarted in attempts to ban certain ATM fees. For example, a federal court in IOWA ruled in 2002 that the state had little or no authority to regulate ATMs operated by national banks.