For Immediate Release - December 20, 2010

Patrick-Murray Administration's Division of Banks Identifies more than 300 Unauthorized ATMs in the Commonwealth

Investigation also finds registered machines fail to comply with state regulations

BOSTON - December 20, 2010 - The Patrick-Murray Administration's Division of Banks today announced the results of an investigation of non-bank owned automated teller machines which found more than 300 machines operating without approval, and another 101 registered machines that did not meet state regulations.

According to records of the Division, the number of authorized non-bank ATMs in the Commonwealth has tripled in the last 10 years. Currently, there are approximately 5,600 non-bank ATMs authorized to operate in Massachusetts. Non-bank ATMs are typically located in areas such as convenience stores or service stations.

"Non-bank ATM operators must follow state regulations, register their machines, and make sure consumers are appropriately aware of the fees and ownership of a machine," said David J. Cotney, the Acting Commissioner of the Division of Banks. "Consumers must have a high level of trust and protection when using an ATM that is not at a bank, and following our registration rules and regulations provides that trust and protection."

The inspections identified over 300 non-bank ATMs operating without authorization throughout the Commonwealth. Under Massachusetts law, non-bank ATM providers must apply for and receive approval by the Division for each ATM location. When a potential operator applies with the Division, it must include information on its ownership, security provisions, proposed surcharges, and other information for the Division's review. The Division issued cease activity directives on Dec. 8 to each location found to be operating an unauthorized ATM. The directives require these locations to cease ATM operations until such time as they are properly authorized by the Division. (Click for a list xls format of ceaseatms.xls
of all locations that were issued the cease activity directives.)

The Division also inspected 101 non-bank ATMs currently authorized to conduct business for compliance with Massachusetts regulations, and found violations at all 101 locations. The most common violations included failing to disclose the contact information of the owner and operator of the ATM and a 24-hour, toll-free contact phone number. Failing to post the Division's contact information, for consumer inquires and unresolved complaints, was also a common violation. The Division issued its findings to the operators of these ATMs detailing the specific corrective action required Dec. 17.

ATMs are required to display the amounts of any surcharge and the right of a consumer to cancel a transaction prior to being assessed a fee. Although systematic violations of these disclosure requirements were not found during the Division's inspections of the non-bank ATMs currently authorized to conduct business, Acting Commissioner Cotney stressed the importance of these regulatory requirements.

"It is crucial that consumers are provided fee, contact data and other information in order to make informed decisions on which ATMs to use," Cotney said.

"With the number of non-bank ATMs growing rapidly, it is important that these ATMs comply with security requirements, as well as fee, contact information and other disclosure provisions, in order to protect consumers and prevent ATM-related crime like identity theft," said Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation.

Consumers are advised to check the Division's listing of locations authorized to establish and operate non-bank ATMs. Consumers who have a complaint or concern with a non-bank ATM may contact the Division's Consumer Hotline at 1-800-495-BANK (2265), extension 501.

Consumers should contact their bank or credit union for a list of the institutions' ATM locations. Customers of banks and credit unions that are members of the SUM Network can also avoid ATM surcharge fees by using an ATM that is part of the SUM network.

The Division of Banks oversees state-chartered banks, check sellers, debt collectors, foreign transmittal agencies, lenders, and mortgage brokers, and is an agency within the Office of Consumer Affairs and Business Regulation. Follow the Office at www.mass.gov/consumer , its Consumer Connections Blog and at its Twitter feed, @Mass_Consumer.