Answer:
Answer by David Dickinson:First, you'll want to check with your state banking department as state laws vary on this issue.
Second, from a federal law perspective, it depends. The definition of lottery [see Section 20 of the Federal Deposit Insurance Act] requires the participants to advance money for the possibility to win. If anyone can use your ATM without paying a fee, then this is not a lottery. However, if they must pay your institution a foreign ATM usage fee, then they must "advance money in exchange for the possibility . . . that one but not all . . will receive . . more than the amounts they have advanced . . ." [Section 20(c)(2)].
Answer:
Answer by Andy Zavoina:I agree with David's reply but want to add to it. Loading a higher denomination bill, say a $50 in the cartridge that normally holds $20s, is common. Typically there are enough people who do not pay ATM usage fees that you don't have a lot of concerns here. If you do routinely charge a fee, your rules will vary.
I have also seen the notice printed on the receipt that they are a winner and they have to visit the bank to claim a prize. That is fine as you may want to record who is the winner, obtain a release to advertise using their name or photo and to record their SSAN for tax reporting. But don't require that they surrender their ATM receipt without providing a substitute or simply annotating that they have already claimed their prize. Reg. E requires you to make a receipt available.
First published on BankersOnline.com 9/25/06
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