CORRECTED-UPDATE 1-TD Bank to retire coin-counting machines after reports of errors

Thu May 19, 2016 3:06pm EDT
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(Corrects fourth paragraph to reflect 29 billion coins counted in 2012, not million)

By Karen Freifeld

NEW YORK May 19 (Reuters) - Toronto-Dominion Bank's TD Bank NA said on Thursday it has decided to retire its Penny Arcade coin-counting machines in the wake of reports that they were short-changing customers.

"We have determined that it is difficult to ensure a consistently great experience for our customers," Michael Rhodes, TD Bank's Head of Consumer Bank, said in a statement. "We will continue to assess the Penny experience and intend to appropriately address customer impact."

Lawsuits are pending against the bank on behalf of customers who had used the machines. In one case, filed in New York state court in Manhattan last month, New Yorker Jeffrey Feinman said the machines once gave him a receipt for $25.44 when he deposited $26 worth of coins, and $30.05 when he deposited $31.

The New York lawsuit claimed the Penny Arcades counted 29 billion coins in 2012. The service was free for account holders and charged an 8 percent fee for everyone else.

"We would hope and expect TD Bank to right this wrong, which has affected not only commercial customers of TD Bank, but also those children that brought in their 'lemonade stand' money to deposit in their savings accounts," said Florida attorney Michael Criden, who filed a class action over the issue last month in U.S. District Court in Miami.

Judith Schmidt, a spokeswoman for the bank, would not comment on the pending litigation.

The bank took the machines out of service in early April for retesting after news reports broadcast inaccuracies. At the time, it said it would bring them back once performance requirements were met.

Rhodes added that usage of the machines, a long-standing service at the bank, had declined over the past few years.

The bank said its tellers would continue to accept pre-rolled coins. (Reporting By Karen Freifeld; Editing by Dan Grebler and Diane Craft)