Fight Against Unfair ATM Surcharge Fees Heads to the U.S. Supreme Court

Forcing consumers to pay twice to withdraw their money once is wrong. And blocking ATM owners from lowering their fees? That’s absurd, and it’s why we weighed in with a legal “friend of the court” brief.

Michael Landis

Last month, U.S. PIRG Education Fund filed an amicus, or “friend of the court,” brief in support of consumers and independent ATM operators in consolidated cases currently pending before the U.S. Supreme Court—Visa Inc. v. Osborn, 15-961, and Visa Inc. v. Stoumbos, 15-962. Relying on in-depth “Big Banks, Bigger Fees” reports that U.S. PIRG Education Fund has produced over the years, the brief illustrates the significant harm that consumers suffer because of the artificially high ATM surcharge fees that they are forced to pay.

An ATM surcharge fee is the fee that a consumer must pay to an ATM owner when using an ATM not operated by his or her bank. Most consumers already pay their own bank an “off-us” or “foreign ATM” fee that is shared with that ATM owner. So, U.S. PIRG often says that ATM surcharges “force consumers to pay twice to use the ATM only once.” U.S. PIRG has led the fight against these unfair fees since they were first permitted in 1996.

But it gets worse than mere double fees. Bank and network practices may be illegally preventing independent ATM owners from charging lower surcharge fees.  According to the complaints that were filed by several consumers and independent ATM operators, Bank of America, Chase, and Wells Fargo entered into anti-competitive agreements to fix the price of ATM surcharge fees in violation of section 1 of the Sherman Antitrust Act.

The price fixing agreements were allegedly made via so-called “access fee rules” that were promulgated by Visa and MasterCard, which, at the time, were associations formed and controlled by the big banks.  The access fee rules prohibit ATM operators from charging a lower surcharge fee to consumers for transactions routed over networks that are less expensive than those owned by Visa and MasterCard.

The specific question before the Supreme Court is a somewhat arcane legal question regarding pleading standards—namely, whether the consumers and independent ATM operators have sufficiently pled a violation of section 1 of the Sherman Antitrust Act. Our friends at Public Justice filed an excellent amicus brief specifically addressing the technical legal issue and also wrote a blog post about it.

The antitrust laws play an important role in ensuring that markets are competitive. If a market is competitive, that gives consumers more choices, allows greater entry by innovative firms, and keeps prices down. The Court’s decision in this case will determine whether the consumers and independent ATM operators harmed in this case can proceed in their effort to stop Visa, MasterCard, and the big banks from forcing consumers to be charged anti-competitive, high surcharge fees.  The Court’s decision will also significantly impact future plaintiffs asserting antitrust claims.

U.S. PIRG Education Fund’s amicus brief filed in this case is the first that was produced “in-house,” although it certainly won’t be the last.  With its recently launched litigation program, U.S. PIRG and U.S. PIRG Education Fund now have another weapon in their fight against powerful interests on behalf of consumers and the public.


Michael Landis

staff | TPIN

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